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Messages - balas

If a investor wishes to invest in a existing windmill by buying the windmill from an existing owner :

a. Does the benefit of 80-IA be extended to the investor i.e. second buyer ?

b. If yes, will the second buyer be entitled for full 10 Year tax holiday OR will he be eligible only for the balance of period unavailed by the original owner ?

Please also reference any case laws in this regard if available.

Thanking In Advance.

Bala FCA., LL.B.
Hello Mr. Bhavesh,

TDS is not to be deducted on Service Tax. There is no provision to deduct tax on service tax which in itself is  a tax. TDS is deducted on 'Income' and not on 'Tax'.

The I.T. Act, under Chapter XVII, specifies on the categories of income which are subjected to TDS  and Service tax is not included 

Hope this helps.

Bala FCA. LL.B
Discussion / Re: Exemption u/s 54
December 28, 2012, 07:04:02 PM
Hello Mr. Gaurav,

In my opinion,  you will be eligible to claim entire LTCG of 13 lakhs.

Pls. refer Sec 2 for defnition of transfer plus Sec 53A of Transfer of Property Act 1882 , reproduced below as applicable to your case :

"transfer"32, in relation to a capital asset, includes,—

(i)  the sale32, exchange32 or relinquishment32 of the asset ; or

35[(v)  any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A36 of the Transfer of Property Act, 1882 (4 of 1882) ; or

Sec 53A : and the transferee has, in part performance of the contract, taken possession of the property or any part thereof,

The objective is to take possession of the property.  You have taken possession in Jan 2012 and have sold the old flat in Aug 2012 which is less than the period of one year.

You can also refer the following case law : Punjab and Haryana High Court in the case of CIT v. Ved Parkash & Sons (HUF) [1994] 207 ITR 148.

Hope this helps.

Bala FCA, LL.B
Discussion / Re: 26As and TDS u/s206AA
December 27, 2012, 02:22:11 PM
Hello Mr. Subbufca,

Please refer CIRCULAR NO. 03 /2011 (I presume you would have).

As per circular, BCDT is aware of mismatches between 16A/26AS.

The deductor being a bank falls under 4.1.1(a) of the circular, in effect they should be able to download 16A from TIN Site and affix digital / manual signature.  In your case, if the bank can do with signing manually on the downloaded 16A certificate.

Ans. to b. It is form 16A which forms the basis of claiming credit. The duly signed 16A by bank should authenticate the same.  26AS is not material for claiming TDS benefit. It is clearly stated so in circular vide 4.2.(i) and Point 6.

So your client should request bankers to issue such a downloaded certificate duly signed. If there is an error in data uploaded, the deductor has to rectify the mistake and thereafter be able to generate the TDS certificate.

Hope this helps.

Hello Mr. Sandz,

Please refer the link posted earlier by me and circular referred in that write up.  Allotment letter is the basis on which 54F can be availed off. In addition, the judgement go in favour of the assessee wherein delays are caused by builder. On the part of the assessee, investment is done and this intent is good enough for 54F.

Coming to your second part,  on the refund of money inliew of property by builder, (presume no gain or loss ) and your investment in property, the original tax exemption should renew. In all probability the A.O may disallow the LTCG benefit availed earlier due to no investment in reality but you need to pursue that you had completed your investment originally in time and failure was on the part of builder. The legislative intent is to the benefit of the assessee / residential unit investor should need to be put forth. In addition your intent / actual reinvestment of the amount in another Residential unit on the refunded amount (the original LTCG) should go in your favour. In effect in your case, the the three year threshold is getting extended but is no fault of yours. I hope you have a strong case.

Let me also do a search if there are any precedents similar in nature and shall post in here.

Hope this helps.


I sold some land in July 2009 and earned capital gain of 3 crore and invested 2.5 crore in an under construction flat with a builder in July 2009 to gain exemption under Sec54 F. I paid proportionate tax on the balance 50 lakhs. Allotment Letter was issued on 20 July 2009.

Now 3 years have passed since I paid the amount and got allotment of flat but the builder has not completed the project in time and may take atleast another 2/3 years.He does not have OC.Builder after much persuasion is willing to refund the money in installments.

What are my options in view of recent judgements since delay is caused by builderand 3years have passed since i recieved my allotment letter.
Pls advise status of the money returned? I plan to reinvest about 1.5cr in another residential property with a reputed builder?
Hi Mr. Sunil,

Additional contribution..Pls reference this article citing various case laws too.  In essence you ar eligible for deduction U/s 54F though building is still under construction beyond the threshold period of three years.


Hope this helps.

Discussion / Re: Interest on Late depsoit of TDS
December 26, 2012, 02:10:44 PM
Hi All,

Interest payment on delayed remittance of TDS is not a deductible business expenditure.
The disallowance will fall U/s 37, General.

Please refer the cases cited and also references to cases in the pleadings :
a. Commissioner of Income-tax  v.  Ashoka Mills Ltd. [1996] 218 ITR 526 (GUJ.) HIGH COURT OF GUJARAT.

Hope this helps.


Hi Mr. Amit,

As the house is let out, interest payment on loan on HP is fully deductible i.e. no limit.  Per your statement,  you can prove that EMI payment is being made by you in full and hence entire interest payment can be attributed to your share (irrespective of each loan applicant eligible to claim to claim interest payment on loan repayment, which is not the case here).

In respect of a let out house property, there are no restrictions on deductions and therefore, there can be loss of any amount under this head.
The loss from one house property can be set off against the income from another
house property. The remaining loss, if any, can be set off against incomes under
any other head like salary. In case the loss does not get wiped out completely, the
balance can be carried forward to the next assessment year to be set off against
the income from house property of that year. However, such carry forward is
restricted to eight assessment years only.

Hope this helps.


You have not stated that you have been assessed on the entire rental income of the house property in total in your ITR in the past.

Assuming entire rental income is assessed in your ITR (I presume house might have devevoled as a legal heir on all co-owners but has no impact for the views being expressed in here), you can claim the entire Loan interest as you have paid the EMI in entirety. You need to prove this point to the A.O.

Pls also refer the following case which nearly parallels your issue and may be of help to you.

Income Tax Appellate Tribunal - Pune
Ajit Vitthal Dake, Ichalkaranji vs Assessee on 25 October, 2012

Hope this helps.

Hello Mr. Sujittalukder,

Please find my views pointwise to your query.

1. : As he stays > 182 days, he will be considered as a Resident in India.

2. : As you pointed in 1, that his presence is more than 182 days in India, he will be treated as a resident in India and not of U.K. Residents are further categorised
as 'Resident and Ordinarily Resident' and Resident but not Ordinarily Resident (R &NOR). Your client falls under R &NOR. Hence will be subjected to 194J.

3. : Your client needs to furnish ITR.

Applicable even if 139(B) becomes applicable as per the below provision :

'Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who during the previous year has any asset (including any financial interest in any entity) located outside India or signing authority in any account located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed'.

Hope the above helps.

My query though is : You have stated your client does not have a fixed base in India. Are your meaning that this is somehow related to 'permanent establishment' as per the DTAA ?
If yes tax applicability becomes debatable. Please check at your end. 

Bala FCA., LLB.
Hello Mr. Sridhara,

Not sure if you are referring the correct Section No.

Pls. refer to Sec 35AD, not sure if this helps your case.

Discussion / Re: TDS notice by Income Tax Officer(TDS)
December 19, 2012, 12:58:05 PM
To answer your query, 'YES', the inspecting officer is entitled to inspect books of account during a survey. Pls. refer to Sec 133A.

Section 133A does not require prior notice to be given to the affected persons regarding the survey. N.K. Mohnot v. Dy. CIT (1995) 215 ITR 275 ( Mad).

Duties of the person whose premise is surveyed :
During the course of survey, the proprietor, employee, or any other person attending to, or helping in, the carrying on of the business or profession is required to :-

i. afford to the income-tax authority conducting the survey, necessary facility to (a)
inspect the books of account and other documents which are available at that place; and (b) check or verify the cash or stock or other valuable articles or thing which are found at that place; and
ii. furnish to the income tax authority conducting the survey, such information as
may be required by him on any matter which may be useful for, or relevant to, any proceedings under the Income-tax Act.

Hope this helps.