Taxation Problem!

This query is : Resolved

Sid (Querist)
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27 June 2009 My uncle sold a piece of land to a friend in oct 08 who got the registration of sale deed done by paying 10% amount and the rest PDC's...which bounced
the 10% which my uncle got he invested in REC bonds and subsequently filed a case u/S 138 and 420 on his friend for the bouncing of cheques

Now 31st July is approching and his taxability seems to be in a mess!

Someone advised him to fill his return without the capital gain portion and only the interest income earned under the "Income from other sources" head....does that make sense?

He does not want to evade tax, and never has, but if he has to pay capital gain, he has no money to do so!

can he get an extension from filing his return on capital gain as the case is pending in the court?

What should he do?

CA.BHARAT BHUSHAN

CA.BHARAT BHUSHAN (Expert)
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27 June 2009 In the given case, Capital gain arises on transfer of capital assets and not on receipt of sale proceeds. Your uncle is certainly liable to capital gain tax.The only remedy available to him is not to file the return now and wait for the conclusion of the case, at least till the time given to file belated return

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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28 June 2009 The transaction of sale is not completed till the agreed consideration is not passed on. In the given case your uncle should file a case for de registration and cancellation of sale deed also. In case the case is decided in your favour you need not pay tax on the capital gains which have not been realised actually.

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