Assessee is charitable Trust under Bombay Public trust Act, having charitable objects in operation since last 15 years. Trust has immovable property as asset and also investment in Fixed deposits out of Funds created for specific purpose . The trustees have decided to convert the same in to Sec. 8 of the Companies Act, with Guarantee. a. whether there are any tax implication under Income tax Act 1961  on such conversion. b. whether any stamp duty is required to be paid.

read more

Assessee is charitable trust having object of having Goshala, construction of Hostel for Girls, Meditation center and research center etc. and also constructed a temple in premises. The trust is having registration u/sec. 12AA and recognition u/Sec. 80 G of the Income Tax.  On the land own by the trust, it had developed a shopping complex and with the permission of Charity commissioner has decided to sale the shops for the purpose of using the funds for construction of cow sheds and meditation center as well as Bhojanshala etc. Till the time the sale proceeds from sale of shops are utilised for the above purpose  the funds are are utilised assessee trust has kept the same in Fixed deposits for a period more than 13 months. 1. Whether there will be tax implication under Income Tax of above in the hands of trust? 2. Whether there profit is taxable as capital gain?

read more

In October 2019, the assessee bought a property at a FMV as stated in a valuation report by a CBDT empaneled valuation officer who is also a valuation officer for the Honourable High Court of Calcutta. In the valuation report, it was stated that the Stamp duty value of the property would be about 5.55% higher than the FMV of the property. The assessee proceeded with the agreement of sale on the basis of the valuation FMV in October 2019 and registered the property in March 2020. The Assessing officer now intends to include the difference in Stamp Duty value and FMV (agreement price) in the assessee’s income as Income from other sources for the AY 2020-21 per Section 56(2)(x) and proceed with penalty proceedings under Section 270A for under-reporting of income. The additional income would be about 12L+ for AY 2020-21 for a currently unknown tax penalty. Is there any merit in the assessee disputing the AO’s order given that the agreement was based on a valuation officer’s FMV. Also, would there be any merit in the assessee appealing the penalty proceedings given that there was no attempt to under-report or mis-report the income in that year.

read more

Mr. G booked a flat in FY 2010-11 and made the payment of booking amount through banking channels. Total consideration to be paid for the flat was Rs.30 Lacs. The builder issued ‘Earnest Money Receipt’ for the same in FY 2010-11. Unregistered agreement was also entered into by the builder and Mr. G in F.Y. 2010-11. In F.Y. 2010-2011Mr. H real brother of Mr. G also transferred some amount from his bank account to Mr. G bank account  for making the payment to the builder. Subsequently sum of the installments were paid from joint account of Mr. G and Mr. H. In the agreement for sale executed before the sub registrar on payment of stamp duty of registration the name of Mr. G & Mr. H as the allottees/purchasers are mentioned. The value taken by registrar for stamp duty is Rs.45Lacs in the yaer 2019. The guideline value of the said flat in the year of booking i.e. F.Y. 2010-11 was less than Rs. 30 Lacs. In limited scrutiny in the case of G & H for investment in immovable property after considering the above details & documents the AO of Mr. G accepted the returned income u/s 143(3). In the case of Mr. H on the basis of same information the AO has issued a show cause notice for proposed variation proposing to tax 50% of difference between 45Lacs and 30 Lacs i.e. Rs.7.5 Lacs as income from other sources. On the following issues: No agreement by Mr. H with builder in FY 2010-11. No payment to builder by Mr. H in FY 2010-11 directly from his bank account.       QUERY: Whether different treatment be given to Mr. H regarding the aforesaid addition when in the case of Mr. G (the co-owner in the same property ) returned income has already been accepted ? Whether in sec. 56(2)(x)(b) proviso 1&2 is qua all the co-purchasers or qua immovable property. Please give detailed reply along with case laws and oblige. Thanks and Regards Tax Professional Ankur Agrawal

read more

As per L&T agreement dated 18.09.2021 Mr. K Mrs. R (wife of Mr. K) and Mr. A became partners of the firms with capitals of Rs. 7 lacs. The ratio of capital contribution and profit sharing ratio was 60%, 20% and 20% respectively. The capital of 7 lacs upto 31.03.2022 was contributed by Mr. K and Mr. A. No capital was contributed by Mrs. R (wife of Mr. K). During F.Y. 2021-22 no business was carried on except purchase of land. In F.Y. 22-2.3 the % of capital contribution and profit sharing ratio was changed with stitulation that the capital will be contributed by the partners in the new proportion as and when required. Query: Since in F.Y. 21-22 Mrs. R (wife of Mr. K) had not contributed the capital what will be the consequences under the LLP Act? The amount of penalty if any? Whether it is advisable to pass a journal entry in F.Y. 21-22 transferring the requisite amount from Mr. K to Mrs. R (wife of Mr. K) ? Whether sec. 269SS of Income Tax will be applicable on the above entry? No tax Audit is Required in the case of LLP for F.Y. 21-22, since no business carried om in the relevant year.

read more

X is a partner in a firm along with other partners. Firm has some assets, properties etc. X has a debit balance in the firm of 10 lakhs . He leaves the firm With lump sum consideration 50 lakhs . Any tax implications for firm or partner?? The status of debit balance in the firm ??

read more

Assessee is private limited co, engaged in the business of manufacturing of steel plates and other allied products . Search action U/Sec. 132 was conducted in the year 2021-22 . During the search in respect of certain purchase bills the assessee was not able to provide the details of Toll receipts, and LR receipts along with the E way Bills . The investigating team has drawn the inference that all these bills are non genuine . On the basis of these defects, during the course of reassessment proceedings initiated U/Sec.148A, AO has issued show cause as to why the purchases should not be considered as non genuine . Assessee has given the reply as under: a. In respect of inference that assessee has not produced Toll receipts, assessee has obtained the same from the transporter, where toll was paid , given the evidence that the vechicle was used the route which do not require toll payment. b. provided the  confirmation as well as account extract of the parties giving their valid GST Numbers and PAN c. Lorry receipts as well as Good received Receipts d. Genuine E Way bills e. Electricity consumption f. quantitative details of consumption of material and inventory Inspite of this the AO proposed to make an addition of 100% of the purchases from such parties , even though the discripancies found were for few bills . Is the action of the AO is justified?

read more

Assessee along with the family members are owners of land . Since they do  not have any knowledge of construction and development of project, They have decided to join the hands with the developer in Joint venture . the main terms of Registered JV are as under :- a. The two parties have decided to work on a Principal to Principal basis b.The detail role and responsibility of the individuals and the Developer have been noted in the JV. The entire cost of construction will be borne by developers and assessee and his family members will not be responsible for any amount . c. The Joint Venture Agreement explains the financial arrangements of the two parties. It describes the built-up sharing between the said individuals and the developer in the ratio of 56:44 . Sale will be effected by JV only and amount received by JV will be shared between them in ratio of 56:44 d. Joint Venture Agreement states that the agreement shall come to an end after the completion of the project, transfer of the property to the respective owners of unit purchaser and after fulfillment of all the terms specified in the agreement. e.The assessee  have received an interest free deposit – from the Developer with respect to the said Joint Venture. These amounts are interest free deposits which shall be refunded to the Developer as per the arrangement prescribed  the Joint Venture Agreement. f. Developer is following project completion method for recognizing the revenue of the project and therefore he has shown the amount paid to land owner out of  booking receipts as advance towards land. and therefore the assessee and family members have also shown the amount received as advance in their books of accounts. Issues : Whether the arrangement entered into by the individuals and the Developer results in the formation of a new entity? When is the land said to be transferred? How will the capital gain be calculated in the hands of the land owner? Implications if land held by the land owners was converted into stock – in – trade and then introduced in Joint Venture. When will the security deposit received by the individuals be liable to tax? Whether there will be any liability under GST on the owners of the land. Pl guide.

read more

PF/ESI deposited after due dates of respective Acts but before due date of filing ITR for A.Y. prior to A.Y. 21-22. Jurisdictional ITAT, Indore Bench consistently deleted the additions made on the above issue, holding that amendments made by Finance Bill 2021 on the above issues are not applicable before 31.03.2021. No subsequent order of Jurisdictional High Court of MP Revision u/s 264 filed before Jurisdictional P.C.I.T. Indore. Query Whether the order of Jurisdictional ITAT are binding in Revision u/s 264? Whether different view can be taken? Citation Please Thanks & Regards

read more

Sir, A NPO registered u/s 12A  filed return of income for AY 2020-21 belatedly though tax audit report was filed within due date.  Exemption was denied u/s 143(1) by CPC,  kindly elucidate follow up action to be taken.

read more