Hello! Everyone
My question is related to income tax. I am putting my question in points. Please suggest me what to do.
1) My elder brother is a salaried person. He has filed his ITR-1 for the AY 2017-18 claiming refund. He has claimed home loan interest deduction of Rs. 2,00,000 showing house as Self occupied however it is vacant property. He has got possesion on 31st march 2016.
2)He has not declared this matter in Form 16 because employer was asking some details of that property.
3) He got an intimation from Income tax department u/s 143(1) which states that gross total income and taxable income is not as per 26AS and Form 16. He has to respond on it or Otherwise they will proceed as they think fit.
4) As I mentioned the possession date is of 31st march 2016,he is eligible for refund this year. But problem is that he has filed his ITR for AY 2015-16 and 2016-17 in which he claimed the same deduction and he got the TDS refund too.
5) On the basis of above information, please tell me that what to do now. Whether he should respond or be silent and let them finalise. He has mentioned in ITR-1 around rupees 3000 as income from other source (bank interest not declared in Form 16) . So I am assuming that department will simply calculate demand notice for that 3000 and after payment of tax on it proceeding will be closed.
6) Unknowingly ha has done mistake. He has done wrong filing for AY 2015-16 and 2016-17. If he will respond to notice and deny for the addition of interest deduction in Gross Income then what I think that he will have to go for documentation to the concerned AO who will surely check the last return and the provided property documents and he will find that return filed was wrong, refund payment was wrong.
7) Please advise taking into considertion all the above points. What will be the effect on last refund received if do not respond and if he responds. In other words, what would be the cosequences now and in future.
Thanks
CAclubindia
