| QUERY: | On sale of ancestral property by NRI at what rate TDS to be deducted by the purchaser? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 11(2), 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source - Non-resident -Sale of Property by NRI |
If income of non-resident is chargeable in India, the purchaser has to deduct the tax @ 20% being rate in force, as per section 112 of the Act.
| QUERY: | NRI (US citizen) wants to sell his ancestral property. Can the said sale proceeds be transferred from India directly or any RBI permission will be required?. At what rate TDS deductible by purchaser? Whether it would be 30% of sale consideration or 30% of LTCG, |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source - Non-resident -TDS on purchase of property by NRI |
As per Regulation 6 of Foreign Exchange Management (Remittance of Assets) (Amendment) Regulations 2014, dated October 31, 2014 the NRI / POI has been permitted to remit not exceeding US$ 2.5 lakhs per financial year of balance held in NRO accounts or sale proceeds of assets or sale proceeds of assets acquired in India by way of inheritance / legacy without prior permission of RBI. If the remittance is in relation to sale proceeds of immovable property the condition is that the property or deposit cumulatively must have been held for a period of ten years.
| QUERY: | Whether TCS is applicable on sale of immovable property above Rs. 50/- lakh? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194IA |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source-Immoveable property -TCS on Immovable Property |
Section 194-1A of the Act provides that if consideration for transfer of an immovable property is Rs. 50/- lakh or above, a person being a transferee (purchaser) is responsible for paying to a resident transferor (seller) any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall at the time of credit of such sum to the account of the transferor (seller) or at the time of payment of such sum in cash or by issue of a cheque or drafts or by any mode, whichever is earlier deduct an amount equal to @ 1% of such sum as income tax thereon.
| QUERY: | BIDCO which is a State Industrial Development Corporation grants a 99 year lease and collects a lump sum premium for granting the lease amounting to Rs. 40 crores. Yearly rent is Rs. 1,000/- . Whether section 194-I is applicable on the lump sum amount? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194I |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source – Rent -Lease premium for grant of lease |
In ITO (TDS) v. Navi Mumbai SEZ (P) Ltd. [38 Taxmann.com 218] the Mumbai Tribunal has taken a view that lease premium paid by the assessee to BIDCO for acquiring leasehold land for a period of 60 years in order to develop a SEZ amounted to capital expenditure which did not fall within meaning of rent under section 194-I of the Act.
| QUERY: | AO passes an order u/s. 179(1) of the Act whereby directors of the concerned Pvt. Co. are jointly and severally held liable for payment of outstanding demand of such Pvt. Co. in which they are directors. Can such directors prefer a writ petition before the Hon’ble High Court challenging the said order? Whether, before initiating recovery proceedings u/s. 179 against directors in respect of dues of a company, it is essential for the revenue to establish that such recovery cannot be made against the company? Whether directors can be made liable for such tax dues of a company even if such non recovery cannot be attributable to any gross neglect, misfeasance or breach of duty on the part of directors? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 179 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Private company - Liability of directors -Applicability of section 179 of the I.T. Act. |
That the Department acquired or get jurisdiction to proceed against the directors of the private limited company, only after it had failed to recover the dues from the company, it was a condition precedent for the Assessing Officer to exercise jurisdiction under section 179(1) against the director of the company. The jurisdictional requirement was not satisfied by a mere statement in the order that recovery proceedings had been conducted against the defaulting company but it had failed to recover its dues. Such a statement should be supported by mentioning briefly the types of efforts made and the results. The notice under section 179(1) did not indicate or give any particulars in respect of the steps taken by the Department to recover the tax dues of the defaulting company and failure thereof.
| QUERY: | A has made full partition of HUF in March 2016. HUF submits ITR for the Assessment year 2017-18. The intimation u/s. 143(1) is received, but no partition u/s. 171 is recorded. What steps the assessee should take? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 171 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Partition – Assessment - Hindu undivided family -Mandatory recording of Partition u/s. 171. |
As per section 153(1) of the Act, time limit for completion of assessment is December 31, 2019 for assessment year 2017-18. So before this date the Assessing Officer should investigate the claim of partition and give finding. However, according to author, partition should have claimed in the assessment year 2016-17, as partition was on March 31, 2016.
| QUERY: | Kindly enlighten us to when the return of the deceased can be filed by the executor if estate was not distributed fully? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 168 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Executors – Income -Return of Deceased |
Section 159 of the Act is meant to enable the revenue to make an assessment on legal representative in respect of income which accrued to or was received by the deceased till his death.
| QUERY: | AB & Co., is a partnership firm having two partners A & B. In April, 2011 search u/s. 132 was conducted on both A & B partners, while survey u/s. 133A was conducted on AB & Co. Some unaccounted sale bills of AB & Co. relating to financial year 2010-11 were found at residence of A. Notice u/s. 153C dated October, 2013 was served on AB & Co. for previous six years. AO has added total of all sale bills found at residence of A in the total income of AB & Co., in financial year 2010-11. a. Whether notice u/s. 153C issued to AB & Co., in October, 2013 is valid or time barred b. Whether total sale bills (and not G.P.) added is proper? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | 133, 153C, CA. H. N. Motiwalla |
| SECTION(S): | |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Assessment - Income of any other person - Search – S.133 |
Section 153B provides time limit for completion of assessment under section 153A. Time limit for completion of assessment for all seven years i.e. preceding six years and the year of search, is two years from the end of the financial year in which last of the authorisation for search under section 132 or for requisition under section 132A executed.
| QUERY: | A company got converted and succeeded into an LLP in 2014. The Assessing Officer issued a notice u/s. 148 of the Act in the name of the company for reopening its case for the A.Y. 2011-12 within the time permissible under the law. The LLP has raised the objection against the reopening that since the company is not in existence, no proceedings lie in absence of any such provision of the Act. Will the objection succeed? Can the situation be different if the notice u/s. 148 had been issued in the name of successor i.e., LLP? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 148 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Reassessment -Notice to non-existing company is invalid |
BDR Builders and Developers Pvt. Ltd. v. ACIT [397 ITR 529], Delhi High Court has held that notice issued after order of the court approving amalgamation in name of non-existent transferred company is invalid. On the same logic notice issued in the name of erstwhile company is also invalid. Therefore contention of the LLP is sustainable
| QUERY: | A is not assessed to tax as his income is below the threshold limit, He holds shares of listed companies since 2009 (the original investment value is Rs. 15,00,000/-) Now during the F.Y. 2016-17, he wishes to sell the shares through stock exchange. Profit in his hand is LTCG and hence, it is exempted. But can the Assessing Officer ask to prove the source of investment of original investment? Can he make the addition of any type, just like the investment made out of undisclosed income? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 147, 148 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | 148, Reassessment - Reopening of assessment – S. 147 |
Section 149 provides that no notice under section 148 shall be issued for the relevant assessment year –
i) If four years have elapsed from the end of the relevant assessment year.
ii) If four years but not less than six years, have elapsed from the end of the relevant assessment year unless income chargeable to tax which has escaped assessment amount to or likely to amount to one lakh rupees or more for that year.
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