IT Return filed defective u/s 139 (9)

This query is : Resolved

Quick Summary

This discussion addresses an Income Tax Return filed as defective under Section 139(9) because the gross receipts in Form 26AS exceeded the declared income, leading to a TDS credit claim without full income disclosure. The user inquired if cash withdrawals, subject to TDS under Section 194N, should be declared as income. Experts clarified that cash withdrawals are not income and advised verifying other TDS entries against Form 26AS to identify the exact mismatch. The user also detailed a property sale transaction and its capital gains calculation, which appeared correctly declared. The advice given was to disagree with the defect notice if confident, stating that TDS under Section 194N is not income.

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 Dear Experts.,
The gross receipts shown in Form 26AS are higher than the total of the receipts shown under all heads of income, on which credit for TDS has been claimed, in the return of income filed. Thus, while credit for TDS is being claimed in the return of income, the corresponding receipts are not fully disclosed in the respective income schedules. Hence, the return of income filed is regarded as defective, as per clause (a) of the Explanation under section 139(9).
I have declared interest income earned from savings bank and FD interest. Apart from this I have Cash Withdrawals of 1144000/- for which TDS deducted u/s 194 N Shall i declare cash withdrawals as income in ITR3 Please guide me. Thanks in Advance.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

01 November 2024 No. Cash withdrawal is not income.
Check other TDS deduction as per Form 26AS, whether all the income as per the form 26AS are declared in ITR?

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 Yes sir apart from I have sold residential property for Rs.7000000/- for which TDS is Rs.70000/- and purchase property @ Rs.5200000/- for which TDS @ Rs.52000/- and construction is almost complete LTCG is Nil and claimed full TDS of Rs.70000/-

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 and the said sold property was gifted my grand father.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

01 November 2024 Have you declared the transaction under schedule CG?

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 Yes sir I have declared it under LTCG
Date of acquisition 17-Mar-14
Date of transfer 23-Nov-23
Sale consideration 70,00,000
Stamp duty value u/s 50C 70,00,000
Acquisition details Financial Year Cost Indexed cost
Gift-2550000*348/220 2013-14 25,50,000 40,33,636
Capital gain 29,66,364
Less: Exemptions Invested CG scheme
amount deposit Exemption
54: Investment in house property, Date - 29-Nov-2023 50,20,000 29,66,364
Taxable Capital gain 0

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

01 November 2024 Then there should not be mismatch. Check which income is mismatched between ITR & form 26AS?

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 for my knowledge the only mismatch is u/s 194N Cash Withdrawals sir?

MANJUNATHA M R

MANJUNATHA M R (Querist)
Follow

01 November 2024 Sir What happens If I disagree the defective notice and submit response to the department?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

01 November 2024 If you are sure, then disagree with the defect. Reason: TDS u/s. 194N is not income.