shivam hy (yel) (83 Points)
25 September 2019Dear Respected Members & Experts,
Recently my grandfather has taken all Advance from buyer 9.5 lac in cash & deposited in Grandson Account (Student). Property will sale after some time but whole amount has received in cash before sale & deposited in Saving ACCOUNT.
How to account this. Will. Notice come from IT deptt. if yes how to show this.
Kapadia Pravin
(17249 Points)
Replied 25 September 2019
shivam hy
(yel)
(83 Points)
Replied 26 September 2019
Sir,
Rural Agricultural land.We received from Buyer whole property amount in advance,Rs. 9.5 lac deposited in my brother account .
Property will sold later.This land comes under my father share(As share in Parent property) .But sell by grandfather bcoz this land in his own name.My father deposit this amount in my brother account(Student). So how should I document this.How to account that Grandfather distribute this land to my father (Orally). No document of anything. I am himself Semi Qualified CA,but unable to understand how should account all these.If IT notice comes in any case. (10 Lac limit is not crossed in my brother saving cash account)
Kapadia Pravin
(17249 Points)
Replied 28 September 2019
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 28 September 2019
1. Sale consideration received in cash will always be a problem. Though you have mentioned the same as rural agricultural land it will not be attracted to capital gain tax.
2. As mentioned by expert above sec 269ST which prohibits cash transactions in excess of Rs. 2 lakhs per day from a single person.
3. Though the sale in itself will be questioned when the entire sale consideration is received though cash and agreement of sale specify the date and mode of receipt of consideration.
4. In your case, the entire amount could be received in part (not exceeding Rs. 2 lakhs) on various dates to avoid violation of sec 269ST.
5. The person in whose name the account is maintained may be questioned regarding this deposit. It is better to get the same through proper banking channel.
6. The solution could be to open a bank account in the name of grandfather and then gift the amount to grandson through DD or cheque from that account. It will be treated as a gift and will not be subject to tax in grandson's hand.
Please correct me if the above solution has an alternative view.
CAclubindia
