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Dear Sir,

Thank you for analysis of law. It is very logial and lucid presentation of law.

Sir, judgement in THE HIGH COURT OF MADRAS T.C.No.311 of 2001, M/s SAKTHI FINANCE LTD, COIMBATORE Vs COMMISSIONER OF INCOME TAX, COIMBATORE  is reported in which ITR or taxamnn?

Yours faithfully,

Bhaskar Rao ITP.

Dear Sir,

Can we have the judgement on the issue. The issue is very important issue.

Yours faithfully,

Bhaskar Rao ITP.

Sir,

In judgement of Hon'ble Mumbai High Court which I found on site (http://itatonline.org/archives/?p=21) it is stated as under:

"While the arrears of the State have priority over private debts owed to ordinary or unsecured creditors, this priority does not extend over secured creditors (subject to statutory exception). The fact that the tax arrears are recoverable as arrears of land revenue makes no difference to this principle; "

Name of judgement is Krishna Lifestyle.

There is many good discusssion in judgement and referred to a\many judgements of Hon'ble Supreme Court on point.

Bhaskar rao, ITP.

Dear Sirs,

Thank you all very much for very valuable advice. I am soory for the late reply as I could nt find article link. Now I have it here: www.dnaindia.com/mobile/report.asp?n=1165583

I am thankful for valuable advice of learned readers.

Yours faithfully,

Bhaskar Rao, ITP.

Sir,

I read article by Shanbag of DNA where he has given fantastic idea for tax planning. I want to implement for clients. However, is there loophole or points missed by author which can put clients in trouble? Please advise urgently. I have analysed the article as follows:

Cap gain for sale of property, the rate is 20% after indexation of cost. If a residential space is purchased before one year or after two years or constructed within three years of sale, capital gains are exempt from tax. Then there is the Capital Gains Account Scheme (CGAS). This scheme is available with some banks wherein one has to deposit the capital gains. If this deposit is utilised for buying property within the specified period, no advance tax is required to be paid on the gains. The deposit in the CGAS has to be made by the investor before the last date of filing his tax returns for the relevant year.

(1) Assessee sold residential house in April 2008. Assessee intend to construct a house within three years, that is, before April 2011. So, as per the law, assessee can take the liberty of depositing the sale proceeds in a bank under CGAS as late as 31.7.2009, which is the last date for filing Assessee's IT returns corresponding to the year 2008-09.

(2) The money actually should have gone to the government. Assessee is merely borrowing it and what's more - Assessee is being paid for it also. For 15 months Assessee can freely utilise the money, including what Assessee would have otherwise paid as advance tax.

(3) In July 2009, under CGAS, Assessee buy a two-year bank fixed deposit. Now, suppose at the end of this period, Assessee do not utilise even a rupee of this amount for constructing the house. What are the consequences? Assessee have to pay capital gains tax in the year 2011-12. The first date for payment of advance tax is 30.9.2011 by which the FD conveniently matures to provide Assessee with the required funds.

(4) There is no punishment. In fact, there is a reward - in terms of earning interest on the CGAS account.

(5) The situation allows you to pull off another trick. The tax would be paid only in 2011. Since Assessee have to pay tax only in 2011-12, Assessee can use the higher cost inflation index pertaining to that year.

(6) Since Assessee have not utilised even one rupee out of the CGAS account, it will be treated as long-term capital gains for 2011-12 and taxed accordingly. In which case, Assessee can invest in 54EC bonds to save tax on these capital gains. He gets further period of six months.


Yours faithfully,

Bhaskar Rao, ITP.

Dear Sir,

Thank you for advice. I will follow it. It is good that there are seniors willing to help so willingly.

Yours faithfully,

Bhaskar Rao ITP.

Is there chance that AO amy regard OTT as cost of acquisition of car because there is no option when you buy car you have to pay ott so it is part of the cost? I see risk of view like this being taken by AO.

Sir,

Thank you for pointing out this important point of law. It will be largely useful but can you give proper book reference because we are not having dtr. Please give from itr or ITD or CTR.

Yours failthfully,

Bhaskar Rao, ITP.

Sir,

I need help on section 50C of Income Tax Act, 1961.

My client is having plot of land which he agreed to sell to builder as part of development agreement in year 2002. The agreement is propoerly stamped in law and there is no undervalue of any sort.

Now the full amount of consideration was received by client in year 2006 and client has returned same as cap gain after claiming indexation.

Now AO claim that there is undervaluation because as per him stamp duty market rates of year 2006 are much higher than agreed consideration value of 2002-2003. He say that section 50C of Income Tax Act, 1961 is applicable and as per him client is taxable on the basis of market value of 2006 and not as per agreement value of 2002.

I read 50C of Income Tax Act, 1961 and AO seems to be correct on a plain reading. But it does not make sense to say that because there is a delay in the execution of the agreement/receipt of consideration etc, assessee can be charged on amount much higher than what he has received.

Sir, can you pl give your valuable opinion on the topic and oblige.

Please respond urgently.

Yours faithfully,

Bhaskar Rao, ITP. 

Sirs,

Thank you very much for your guidance. I will read case laws given by you and try to understand such a complicated subject.  ??? :'(

Yours faithfully,

Bhaskar Rao, ITP.

Sirs,

Thank you very much for the speedy response. I am very grateful for your help. I am not having much exposure to the legal aspects and that is why I was worried that something untoward in law may happen. I am feeling less-worried now because I know there are people with knowledge and expertise willing to come forward and help and clarify all my doubts. I will also study the  Master Guide to Income-tax and take all steps as per your guidance.

Thank you again sir for such quick replies.

Yours faithfully,

Bhaskar Rao, ITP.

Sir,

I am ITP. My client has received notice u/s 147 of IT Act, 1961 asking to furnish return within 30 days. Can you please advice what are the steps to be taken in the law? I read the articles section but there is no answer there. Is there any article which deals with the topic. How to proceed so as to ensure that my client is not fall foul of law while at the same time protect his interest so that there is nothing untoward to happen in law.  Please respond urgently.

Yours faithfully,

Bhaskar Rao, ITP.