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[charitable and religious objects.(mixed objects). The trust was granted registration u/s 12AA of the Act and also 80G. However, the certificate for 80G states that if the income is expended more than the 5% on religious objects, it will loose the benefit of 80G.The temple is renovating its premises and requires heavy amounts for the same and there are philantropic donors for the same.My questions are :1. can 80G certificate be given to them?2. in which year will the AO cancel the 80G benefit granted to the trust? is it prospective or retrospective?3. will the cancellation of 80G be also render the trust disentitlement of registration u/s 12AA.4. How is this income or the statutory per centage calculated/An early reply will be greatly appreciated.]

My client (temple) is a  trust having both charitable and religious objects.(mixed objects). The trust was granted registration u/s 12AA of the Act and also 80G. However, the certificate for 80G states that if the income is expended more than the 5% on religious objects, it will loose the benefit of 80G.
The temple is renovating its premises and requires heavy amounts for the same and there are philantropic donors for the same.
My questions are :
1. can 80G certificate be given to them?
2. in which year will the AO cancel the 80G benefit granted to the trust? is it prospective or retrospective?
3. will the cancellation of 80G be also render the trust disentitlement of registration u/s 12AA.
4. How is this income or the statutory per centage calculated/

An early reply will be greatly appreciated.

Respected Agarwalji,

Please give case law in support of the proposition that ICD are different from loans and advances.


An early action will be greatly appreciated.

With best regards,

Murali

My client had received ICD from another company where there is only common shareholder. my client (assessee company) is not a shareholder of the other company. The AO under directions of Addl CIT had included the ICD as deemed dividends. On appeal, the CIT(A) allowed the claim. The department is in appeal before the ITAT.

Please advise whether the action of the AO is correct? Any case law to support the claim of the assessee company.

An early reply will be greatly appreciated as the appeal is listed for hearing on Monday.

 What is your view, then on the comment made by Sri Subhash Agarwal?

There is a special bench of the Vishakapatnam Bench on the issue that this section is applicable only to the payments outstanding as at the year end and not for the payments which have been concluded. Further the Hon'ble AP High Court has issued " interim stay" on this order. Please indicate the meaning of this order and whether there are any other case law on this subject.

An early response will be greatly appreciated 

My client has purchased land in 1978 for Rs.10000/- and thereafter in 1979 constructed building  investing a sum of Rs.100000/-He was using this property for self occupation. Around 1985 he made certain improvements amounting to Rs.100000/-. He entered into a development agreement and in lieu of the land and building he got 5 flats towards his share and the developer got 7 flats. The five flats were in different floors. Two on one floor and the remaining one on each floor. Owing to financial stringency, he sold three flats in a semi finished condition on as is where is basis.

Can the assessee claim deduction under 54 and 54F for the long term capital gains for the value of the seven flats?
Will there be any short term capital gains as the flats were sold on as is where is basis?

Kindly render your considered opinion with case law on the subject at the earliest.

My client was allotted a plot of land by a co-operative society in 1993, which was not registered in his name. This plot was sold in 1995, based on the said allotment, and no return of income was filed reflecting this transaction.

The present "owner" was not accorded municipal sanction as he was informed that there was "defective title" passed onto him, as the plot was not registered in the original owner's name by the society. This defect was rectified and the plot was registered in the "original owner's" name after payment of the required charges in 2010.

The following issues arise which require clarification -

1. Which is the year to be taken for ownership purposes?
2. What is effect of payment of the betterment charges, etc in 2010?
3. Can the rectification of the defect be traced to the original sale transaction?
4. Will the provision of section 50C apply in the instant case since the property has to re-registered?
5. Can there be two registrations for the same transaction concerning the same property.?

An early reply will be greatly appreciated.

Ch.G.Murali

The moderator must assist in putting up the gist of the decision for the benefit of the readers

My client entered into a development agreement at Chennai for construction of a residential complex. As consideration thereof she received three flats, each on a different floor one over the above. Her family being large, she occupied the ground floor portion and the remaining members of the family were staying on the other floors. There was a common kitchen.

In the computation of capital gains, she claimed exemption u/s 54 of the Act the value of these flats.

The AO has disallowed the claim on the ground that it comprises of more than one "residence". However, the CIT(A) had allowed the appeal of the assessee. The department is on second appeal before the Hon'ble ITAT.

Is the decision of the AO correct? Are there any case law on the subject of "residence" and its meaning thereof. A Chennai bench of ITAT order or Madras High Court would be preferable.

A early reply will be GREATLY appreciated as the appeal is posted for hearing next week.

 The assessee filed original return of income, in time, and claimed deduction u/s 80-IA of the Act on the presumption that the project will be completed as per schedule. However, owing to recession, the project could not be completed and therefore, the assessee filed a revised return of income within  year withdrawing the claim.

The assessment was completed after verifying the books of account. The AO initiated penalty proceedings and levied penalty for "furnishing inaccurate particulars" of income. Aggrieved against the penalty, the assessee has preferred an appeal.

Is the action of the AO correct and legally tenable?

Kindly give your considered opinion with case law to support the action of the assessee.

 My client has been declaring commission income from non-life insurance under the head "income from other sources" in the past. In the current year, received commission receipts more than the threshold limit u/s 44AB. What is the position under law? Should tax audit be carried out or not? Is it business income in the first instance?

Kindly clarify at the earliest so that the return may be filed before the due date, as applicable?

My client is a partnership firm. It filed its return of income, electronically for the assessment year 2008-09, claiming loss to be carried forward and accompanied with a claim of refund being the TDS on rent. The firm earns property income and also carries money lending business and by virtue of computation arrived at a net loss.

However, the acknowledgement was not sent to Bangalore through an oversight. This error/mistake was realised only recently when the matter was being processed for refund in the group.

Can a revised return or any return of income be filed at thus juncture,even if the firm is prepared to loose the benefit of carry forward of loss. The TDS is very substantial and cannot be ignored.

Kindly suggest the course of action with relevant case law to support the issue.

A quick response from the fraternity will be greatly appreciated and the firm will be obliged.

 The correct position is to make an application to the bench and get an order with a direction to the AO to refund the excess amount paid.

My client has filed return of income in time. However, during the assessment proceedings certain mistakes were noticed and the revised computation of total income was filed with a covering letter to the AO and claimed loss to be setoff against future income. The latter did not take any action on this letter and completed the income on an estimate basis.

Is the claim correct? Is there any case law to substantiate the claim without filing the revise return of income?

 can the AO deny exemption u/s 12 if the return of income for a particular year has not been filed? Can sums received for tsunami victims be treated as voluntary contributions from the public and brought to tax?