In the F.Y 2019-2020, assessee received gift of Rs. 1 crores from his grandfather by account payee cheque and supported by proper gift deed. Grandfather is assessed to tax regularly and had income of Rs. 5,00,000/- for the F.Y 2019-2020 which comprises of income from House Property and interest. During the course of assessment proceedings, assessing officer issued a show cause to the assessee asking him as to why the addition u/s 68 of the Act should not be made in respect of receipt of gift from the grandfather as grandfather had only income of Rs.5,00,000/-. Assessee submitted the affidavit of the grandfather giving the explanation that even though the income of Rs. 5,00,000/-, he had collected his deposits which he has given in the earlier years and given the gift out of said funds. Further, he has also submitted the balance sheet for the preceding 3 years which indicates that his capital account is more than Rs. 1.5 crores in each of the said years. The AO issued summons to the grandfather, however, he did not appear before the AO. The AO therefore made an addition u/s 68 in hands of the individual amounting to Rs. 1 crores on the ground that grandfather does not have proper source and has not appeared before the AO. Is the action of AO legally justified?

read more

Assessee is a start up company and issued the shares to the investors at a premium of Rs. 200 per share. During the course of assessment proceedings for A.Y 2020-21, AO issued a show cause as to why share premium received by the assessee company should not be taxed in the hands of the company under Section 56(2)(viib) of the Act. The assessee company submitted a detailed reply,however the AO proceeded to make addition under Section 56(2)(viib) on the ground that the assessee company could not give proper justification for acceptance of the premium, without considering the fact that the share premium has been accepted on the basis of valuation report wherein, the DCF method for valuation has been adopted. Whether the action of the AO is legally correct?

read more

Assessee is individual and regularly doing investment in share. He has invested share of few co. He has purchase the shares of two co through authorised stock broker and paid the amount by account payee cheques .  After 4 years of holding the said shares He sold the shares again through authorise stock brokers and received money as per settlement of stock exchange. During the course of assessment proceedings , AO has given show cause as to why sale proceeds of shares should not be added U/Sec. 68 on the ground that the shares of these co are penny stock and the rise of share price is 4O0 times. The said co does not have Turnover or strong Financials.  And also show case as to why the  remaining unsold shares  on the same price   should not be taxes as unexplained investment. Assessee has given detailed reply, however AO has made addition U/Sec.68 the sale proceeds of shares and unsold shares on same price without giving any reference to any section. Whether AO is justified in doing so?

read more

Suppose I have ltcg of Rs 1.5 lakhs under section 112a. How to claim a deduction of Rs 1 lakh. In which schedule?

read more

IN THE CASE.. MOTHER OF THE ASSESSEE RECEIVED RS 5000000/- FIFTY LACS FROM THE BUILDER AS SHE AGREED TO REDEVLOP THE PLOT WHICH STOOD IN HER NAME…THERE WAS NO SALE OF PLOT..ONLY PARTING OF TDR FSI..THAT TOO TO THE TUNE OF 25% AND THE REMAINING 75% WAS RETAINED BY HER…AMOUNT WAS RECEIVED BY HER…THE THREE LEGAL HEIRS HAD TO EXECUTE DEVELOPMENT AGREEMENT..ITAT MUMBAI HAS GIVEN AT LEAST 10 JUDGEMENTS THAT SUCH INCOME IS NOT CAPITAL GAIN AS THERE IS NO SALE…INCOME TAX OFFICER DISAGREES..ADDED BACK AS SALE OF PLOT AND ADDED 1.14 CR IN THE CASE OF ONE LEGAL HEIR..IN THE CASE OF SECOND LEGAL HEIR ALSO 1/3 RD AMOUNT HAS BEEN ADDED AS CAPITAL GAINS INCOME…DOUBLE TAXATION ON THE SAME INCOME…WHAT SHOULD BE THE POSITION…NOW THE CASE HAS COME UP BEFORE THE FACELESS AUTHORITY OF APPEALS…WHAT DEFENCE SHOULD I TAKE…

read more

In a LLP partners capital is at Rs 10 lacs and reserves and surplus are of Rs 100 lacs. on dissolution of partnership, partners will get 110 lacs . whether 100 lacs received on dissolution is taxable in the hands of partner. note reserves and surplus created from share premium account , and stand as reserves in LLP on conversion from company to LLP

read more

Can AO file second appeal before ITAT  against order of CIT[A] 1] when his predecessor accepted in remand report that correct quantum of addition was below low tax effect & 2] and CIT [a] deleted addition on merits ?

read more

What is the remedy for non payment of refunds under  VSVT , 2020 ? Is it liable to any compensatory interest ?

read more

1] can partition of HUF be unequal /only in favour of 1 member ? 2] Can  Karta’s wife claim rights in 2 HUF , viz, huf of  father and huf of  husband ? 3] IS order u/s 171  mandatory for partition of HUF ? 4] Is it possible to allot assets to coparceners individually  instead of huf of each coparceners ? 5] How many generations Any HUF can continue ?

read more

Even after amendments , if a retiring partners takes only capital balance in his account , what will be impact on taxation of firm/partner of reconstitution caused by retirement ? Will it amount to relinquishment of rights in FMV of properties to new partners at Zero value ?

read more