Search Results For: CA. H. N. Motiwalla


QUERY: If husband invests his own funds in house property but the property was purchased in his wife’s name and the same is sold, in whose hands the capital gains will be chargeable to tax?
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Husband has invested his own funds in house property but the property was purchased in his wife’s name. So he has transferred the property to his wife. On sale of the said property the capital gains would be chargeable in the hands of husband

QUERY: Mr. X owns more than one residential house property. He makes a gift of ` 80 lakhs to Mrs. X who does not own any house property. She buys a commercial property using the gift amount and sells it after 4 years. She then purchases a residential house in her name and claims deduction u/s. 54F of the Act.
Even if clubbing provisions are applicable it appears the net income i.e. amount of Capital Gain after claiming deduction u/s. 54F, only could be clubbed with the income of Mr. X. Is it correct?
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The income will have to be computed as if it is being assessed in the hands of the spouse or minor child and then translated into the hands of other spouse or parent, as the case may be

QUERY: Whether clubbing provisions of section 64(2) can be said to be applicable to the HUF in respect of sum of money received without consideration as the wordings in the section relate to only property? Can it be said that the sum of money received is separate from the property envisaged in section 64(2)?
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Yes, Normally property has been understood in widest possible terms. The Explanation 1 to section 64(2) clarifies that the word “property” has been defined very widely. Property includes any interest in property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method such other property. Therefore “any sum of money” is property.

QUERY: If an individual sells gold for inadequate consideration on March 1, 2016 to an associate company would amended provisions of section 56(2) apply to it?
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In this case, individual has transferred or sold gold for inadequate consideration on March 1, 2016 to associate company i.e. for assessment year 2016-17 therefore amended provision would not be applicable.

QUERY: What are tax implication u/s. 56(2)(viia) in respect of gift of shares by one company to another company? Would it make difference if both companies have common shareholders? If all the shareholders are relatives with each other as defined u/s. 56 would the answer be different?
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Section 2(31) of the Income-tax Act, 1961 defines “person”, which includes a company. A company is a separate juristic entity distinct from its shareholders. Thus company is taxable entity distinct from its shareholders. Section 56(2)(viia) applies to unlisted company, so if one unlisted company receives a gift of shares of unlisted company from another unlised company this section would be applicable.

QUERY: Can I accept gift from my father's own younger brother for my HUF consisting of myself, my wife and children?
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There is no restriction from accepting gift from your real uncle (your father’s younger brother) for your HUF consisting of yourself, your wife and children, but the same would be taxable in the hands of your HUF.

QUERY: An immovable property is purchased by a firm at circle rate. Whether S. 56(2)(vii) is applicable? Further, registration would be in the name of individual partners. Will this alter the applicability of Section 56(2)(vii)?
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S. 56(2)(vii) is applicable to only individual or HUF who receives any money, an immovable property or any property, other than immovable property without consideration or for consideration which is less than the aggregate stamp duty value, if fair market value of the property or value exceeds Rs. 50,000/-.

QUERY: Whether the Assessing Officer is justified in making addition of difference between Stamp Duty value and purchase price of agricultural land under section 56(2)(vii) of the Act?
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This section is opposite of section 50C of the Act. Section 50C is applicable to seller of land or building or both, while this section is applicable to the purchaser of land or building or both.

QUERY: A’s HUF consists of karta A and Members Mrs. A, S-1 and D-1. The HUF derives income of ₹ 3 lakhs as interest on FD with bank and agri. income of ₹ 10 lakhs.
Now HUF can make a reasonable gift to its members. Also income received by a member out of the HUF income is also exempt u/s. 10 (2).
What are the tax implications of receiving gift in the hands of member taking into account provisions of Sec. 10 (2) and Section 56 (2) (x) ?
It appears that there would be no liability in the hands of member concerned u/s. 56(2)(x) since the income itself is exempt u/s. 10(2). Is it correct?
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S. 56(2)(vii) was applicable up to March 31, 2017

QUERY: Gift to HUF by members:
a) What will be the tax implications of a gift by cheque (sum of money), given by a member to the HUF?
b) Whether the member will be considered as a relative as defined in explanation to clause (vii) of section 56(2) and consequently the gift not considered as income from other sources for the HUF as per section 56(2)(x)(a)?
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A gift by a member to HUF is not taxable as per section 56(2)(vii) read with Explanation to section 56(2)(x).