Search Results For: capital gains


QUERY: P had offered capital gains to tax in the years in which the flats were sold and the moneys received by him and paid the tax. Subsequently, the Assessing officer re-opened the earlier year in which agreement was made and possession handed over, and brought the entire gains to tax in that year. The stand of the department has been upheld in appeal upto the High Court. P wishes to know whether the department will automatically adjust the taxes paid for the subsequent years or whether he has to claim refund for those years. How will interest be calculated, since the taxes have already been paid for other years?
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The provisions of section 245 of the Act, are for the benefit of both department and the taxpayer. Therefore, it would be duty of the AO to set-off under this section if the assessee claims it and proves that he is entitled

QUERY: A company has credited gain arising from transfer of a capital assets directly to capital reserve account, without routing through profit and loss account. The auditor has not qualified the accounts and the ROC also has not taken any objection to the accounts. Whether Assessing Officer can add back this amount to the book profit while calculating MAT liability?
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From the query it is not clear what type of a capital asset has been transferred and directly credited to capital reserve account.

The cardinal principle has been propounded by the Supreme Court in Apollo Tyres Ltd. vs. CIT [255 ITR 273], while deciding the matter under Section 115J of the Income-tax Act, 1961 which was precursor to

QUERY: A Ltd. has a brought forward losses of Rs. 1/- crore. During the F.Y. 2012-13, it has sold the depreciable asset being office premises which was purchased 5 years ago. The sale value is Rs. 5/- crore and the W.D.V. of said premise is Rs. 1/- crore.

A Ltd. wishes to adjust the brought forward business loss of Rs. 1/- crore against the deemed Capital Gain u/s. 50 relying on the Mumbai Tribunal decision in case of Digital electronics reported in 49 DTR 484.

The tax advisor of A Ltd. do not agree with the action of A Ltd. as regard the set off of business losses against the short term capital gain computed u/s. 50 in view of special bench decision in case of Nandi Steel reported in 134 ITD 73 (Bom.)
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Yes, the income tax is one tax. Section 14 of the Act, classifies the taxable income under different heads for the purpose of computation of net income of the assessee. Though, for the purpose of computation of the income,

QUERY: Mr. X has purchased single premium money back plan of LIC; called New Bima Bachat Policy. Sum assured is Rs. 7,00,000/-. He has paid a single premium of Rs. 5,59,843/-. He will be getting Rs. 1,05,000/- as survival bonus after every three years from LIC during the span of 15 years and there after the sum assured with Bonus on maturity.

The survival bonus and sum assured with bonus, receivable during the life time of Mr. X, is taxable in his hands as there is no exemption available as per the provisions of section 10 (10D) of the Income tax Act. There will be TDS also on this amount. Mr. X has not claimed deduction under section 80C on this premium paid, which in any case would have been Rs. 70,000/- only.

In this connection, the following questions arise:

1. Is there any specific provision under the Income tax Act by which this amount is taxed under the head “Income from other sources”?

2. Is it possible to show the income under head Capital Gain?

3. Is there any provision to claim the investment made in the policy as cost against the survival benefits?

4. If yes then how the same is to be claimed i.e. can one claim the cost by dividing it against the survival benefit receivable after every three years and then pay tax on entire amount received on maturity.


5. If the investment made is not allowed to be deducted from the survival amount receivable, will it not be unconstitutional as this will amount to taxing gross receipt and not income.
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From the facts, it is clear that Mr. X has taken money back insurance policy called as New Bima Bachat Policy. As per the terms of the said policy, it is a single premium payment policy, where sum assured will be paid back to the policy holder in the form of survival benefit periodically.

QUERY: A HUF was having a house property which was let out and rent was charged under the head ‘Income from House Property’ on which tax was paid. The said property was sold for Rs. 30/- lakhs which the HUF wants to invest in the name of coparcener (daughter). Whether HUF is entitled to get benefit under section 54F of the Income-tax Act, 1961 as coparcener is a part of the HUF?
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According to me no benefit would be available to the HUF if it invests in the name of coparcener. Under section 2 (31) read with section 4 the HUF as well as coparcener are separate assessable entities. This view is supported by the decision of Income Tax Appellate Tribunal, Nagpur Bench in ITO vs. Prakash Timaji Dhangode [258 ITR (AT) 114], where the Tribunal has held as under:

QUERY: A flat was sold. The AO adopted stamp duty value. The assessee invested full stamp duty value in another flat. Whether the assessee is entitled for deduction under section 54F?
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QUERY: In the joint development agreement, when land owner is entitled to 5 flats in a building to be constructed by the developer on land belonging to the assessee landlord, is exemption u/s. 54F available to the assessee land lord?
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From the fact it is clear that land owner would retain the land and developer would allot five flats as consideration for transfer of development right to developer.

As per DCIT v. G. Raghuram [46 ITR 136 (Hyd.)], the cost

QUERY: An assessee received residential house property under will during financial year 2000-01. The previous owner of property had purchased the property in the year 1975. The said property has been dismantled by the assessee and same is sold under the construction stage during the financial year 2009-10. Can assessee get exemption u/s. 54 or not. If not, can the assessee get the exemption u/s. 54F due to property is under construction ( i.e., said property is not residential property at the time of sales).
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As I understand from the query, that the assessee has received a residential house property under will during the financial year 2000-01, which was purchased by the previous owner in 1975. Now dismantling the said property, the assessee has sold the said property in the financial year 2009-10. I presume that the previous owner was

QUERY: As per sections 54/54F of the Act capital gain arising from sale of a residential house is exempt if the amount of capital gain is invested in purchase or construction of another residential house by the assessee. Whether the exemption is available if the new house is purchased by the assessee jointly in the name of wife?
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In CIT v. Ravinder Kumar Arora [342 ITR 38 (Del.)], the facts were, the assessee claimed exemption of capital gain to the extent of Rs. 3,18,59,276/- under section 54F of the Act on account of purchase of a new house property, out of the total gain arising from sale of land. The AO rejected the claim because the house had been purchased in the joint names of

QUERY: X is the owner of a flat, and he is also a co-owner in another flat with his wife. They wish to sell both these flats and invest the proceeds in a larger apartment,. X wishes to know whether such joint investment in one flat will be sufficient for capital gains exemption.
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Yes. The main purpose of section 54 of the Income tax Act, 1961 is to give relief in respect of profits on the sale of a residential house. Section 54F of the Act, provides that where any capital gains arises from the transfer of any long term capital asset, other than residential house and the assessee purchases within one year before or after the date on which