Property showing in Balance sheet

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This discussion addresses whether a jointly owned commercial property, where rental income is split but purchase payments were solely made by one owner, needs to be shown in the other owner's books of accounts. The advice clarifies that property value should be reflected according to ownership ratios shown in purchase documents. While not strictly required for income tax returns filed under Section 44AD, it's necessary for internal bookkeeping purposes.

DIVYESH JAIN

DIVYESH JAIN (Querist)

20 November 2020 Dear Sir,

I have a rented commercial apartment in which I am the first holder and my mother is the second holder.

We have divided the rental income equally between both of us but all the installation payments for purchase of the property were made by my mother's bank account.

Is it necessary for me to show the property in my books of accounts as all the payments were made by my mother on my behalf and at present the entire value of the property is reflected in my mother's books of accounts.

We file our income tax returns under individual capacity U/s 44AD.

Please help me regarding this matter.

Regards,
Divyesh Jain

CA Shiv Kumar Sharma

CA Shiv Kumar Sharma (Expert)

23 November 2020 Dear Sir, You have to show Property value in ratio of your Ownership as shown in Property Purchase Documents. If you are filing your ITR under Section -44AD, then this property value is not required to shown in ITR but if you are maintaining books of accounts for Internal Purpose then you must segregate the same. If still you have any Query , you can contact us at - 9911303737

DIVYESH JAIN

DIVYESH JAIN (Querist)

23 November 2020 Thanks a lot Shiv Kumarji for your reply

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