Search Results For: Income from House Property


QUERY: An Assessee, inadvertently due to mistake of Law, made a wrong Choice of option in computing the Long Term Capital Gains on Sale of Ancestorial House Property by deducting from the Sale Price, the value of the House Property as on 1-4-1981 as per the Valuation Report and paid Tax @10%.

The Learned Assessing Officer completed the Assessment under Section 143(1) of the Income-tax Act, 1961, and made demand for interest under Section 234B and Section 234C of the Income-tax Act, 1961.

Then, it was discovered that, had the Assessee deducted the indexed value of the House Property from the Sale Proceeds and paid Tax @ 20%. There would have been substantial Refunds.

The Assessee made an Application under Section 154 of the Income-tax Act, 1961, for rectification of the mistake of law committed by the Assessee in making wrong choice because of ignorance, which was rejected by the Learned Assessing Officer.

The Learned Commissioner of Income Tax (Appeals) also rejected the Assessee’s Appeal on the grounds that, that mistake would have been rectified by submitting a Revised Return. Since the time for filing of Revised Return of Income has expired, the Assessee has no remedy.

May we request you to suggest the Remedy in this particular situation, as per the Spirits and Legislations and Departmental Circular No. 14(XL 35) of 1955 dated 1-4-1955, which both the Assessing Officer as well as the Learned Commissioner of Income Tax (Appeals) rejected on the grounds that, the Circular being issued prior to 1961, is obsolete under what provisions of law CBDT may be approached for granting the relief.

I shall appreciate your considered response, at an early date.
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From the facts it is not clear for which assessment year the intimation was issued under section 143(1) of the Act and whether assessment under section 143(3) is pending or not? Further date of intimation is also not mentioned.

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: 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: I sold my residential house property for Rs. 1.2 crores in December, 2013 which I wanted to re-invest in NHAI bonds. I understand that the investment in NHAI bonds needs to be made within 6 months from the date of sale and the restriction for such investment is Rs. 50/- lakhs per financial year. Accordingly, I made a plan of invest Rs. 50/- lakhs in January, 2014 once and again in May, 2014 Rs. 50 lakhs whether I would get a exemption of Rs. 1/- crore from long term capital gain tax. However, my advisor informed me that there are some litigations involved in this point. Can you please clarify what exactly is the litigation involved and how it can be mitigated?If that is so why is this restriction of Rs. 50/- lakhs per financial year has been prescribed in the Act?
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Yes, In ITO v. Ms. Rania Faleiro [142 ITD 769] the Panji Tribunal has held as un-der:

“The plain reading of section 54EC(1) as well as the proviso thereto clearly sug-gests that the limit of Rs. 50 lakhs as given under the proviso is as per person per financial year. There is no ambiguity in the interpretation, Had there been an intention of the legislature to restrict the exemption of Rs. 50 lakhs, the legislature would have provided the embargo in this regard

QUERY: Mr. X has let out his residential flat to a prestigious company. As per the requirement of the company and as is customary in the area, the flat, which was not in proper condition, was required to be repaired and refurbished with modern decor. Mr. X also has to install air conditioners in all the rooms. Mr. X also had to pay one month rent as commission / brokerage to a broker who arranged the deal. Mr. X also had to pay society charges and other maintenance / contribution charges to the society. Besides, Mr. X also has to incur various administrative costs. The rent is one single amount. What amounts are deductible from the rent income in the hands of Mr. X?

Will there be any difference if:

(i) Instead of Mr. X, a company was owner with one of its objects being dealing in immovable properties?

(ii) Instead of one, say, dozen properties are let out to different persons.

(iii) In case the company is owner, the company has also to incur expenses on audit fees, ROC filing fees, director fees, etc.
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In Tube Rose Estates (P) Ltd., v. ACIT [123 ITD 498] the Delhi Tribunal has held that the brokerage payable by an assessee for renting out the premises could neither be deducted from the rent under section. 23 nor it was allowable as a deduction under section 24 of the Income-tax Act, 1961.

QUERY: Assessee is a developer of housing complex. He intends to sell all the flats in a building constructed. However later on instead of selling flats assessee gave them on the rent. Under which head of income such rental income would be taxable? Further it sells such flats after 7/8 years to same tenants. Whether sale proceeds be taxed as business income or capital gains?
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Under the Income-tax Act 1961, the income of an assessee is one and various sections direct the modes in which the income is to be charged. No one of those sections can be treated as general or specific for the purpose of any one particular source of income; they all are specific and deal with various heads in which an item of income of an assessee falls. These sections are mutually exclusive and where an item of income falls specifically under one head, it has to be charged under that head and no other.