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Capital gains not reported in returns

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Samir

ACA

113 Points Posted on 20 September 2013

Dear members need a Help,

An assesse sold a property (transferred after death of father) on Dt. 25-07-2010 (FY: 2010-2011) & invested complete proceeds in buying another property on Dt. 14-07-2011. (Before due date of filling returns for 2010-2011)

However in Returns of F.Y 2010-2011 this transaction was not mentioned, neither the exemption u/s 54 was claimed. The date of revising returns for F.Y 2010-2011 has also elapsed. This transaction has been reported in AIR & a letter seeking information on the transaction was received by the assesse, from ITO, Compliance Management Cell, New Delhi, which the assesse has replied.

Now what is the way out, in case AO claims that this transaction has been concealed in returns of F.Y 2010-2011?

Can an application to allow the exemption for Capital Gains be filed, If the AO adds the Capital Gains to income?

Can this transaction incorporated in returns of F.Y 2011-2012 (When the Capital gains were invested)?

Replies (1)

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Posted on 20 September 2013

Dear Samir sir,

1. No, the application for the same is not allowed. Only way to have exemption under income tax provisions is revision of ITR. (as decided by supreme court in a case). And yes, it would be treated as concealment on the client's part, as the income has been escaped with relevant proofs available with IT dept. to substantiate the same.

2. yes, i think, you would be allowed to claim exemption in ITR for A.Y. 2012-13. Just revise the ITR, if revision required.

Best Regards,
CA Lovely Arora
Lovely Arora and Associates
ca.lovelyarora @ gmail.com