Notice received under rule 37BA

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A taxpayer sold a property in FY 2022-23, with the sale agreement executed then, but registration in FY 2023-24. They claimed tax exemptions based on the agreement date for FY 2022-23, using proceeds for a flat and bonds. Now, a notice from CPC indicates a mismatch with Form 26AS. Guidance is sought on responding to this notice, potentially by clarifying the transaction's completion date and providing supporting documents.

shamsheer

shamsheer (Querist)
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30 December 2024 Dear Sir/Madam,

I sold my property for ₹8 crores in the financial year 2022-23, with the sale agreement executed during that period. However, the registration of the property took place in May 2023, which falls under FY 2023-24. Consequently, the TDS related to this transaction was also reflected in FY 2023-24.

To avail of tax exemptions, I utilized the proceeds from the sale to purchase a flat for ₹4 crores and invested ₹50 lakhs in bonds during FY 2022-23. I claimed these exemptions in my tax return for FY 2022-23, based on the sale agreement rather than the registration date.

In my tax return for FY 2023-24, I reported my regular income and adjusted the TDS paid accordingly. However, I have now received a notice from the CPC stating that my income does not align with the details in Form 26AS.
I request your guidance on how to respond to this notice, either by clarifying the transaction details or providing additional documentation to reconcile the income shown in my returns.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 December 2024 How much advance you received in FY 2022-23?
Whether possession was handed over then?

shamsheer

shamsheer (Querist)
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30 December 2024 Hi Sir, Out of the 8 Cr, 5.6 Cr was received in FY 22-23, and they took control of the building after the payment of 5.6 Cr. However, there was no written document was prepared.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 December 2024 Unless the justification of transaction completed in FY 2022-23 is provided, you cannot properly reply the notice. Contact any expert professional in your area to justify the Rs. 50 lakhs investment.
The investment in HP you can claim even in FY 2023-24.

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