Dear sir/madam
My father invested in a residential flat in 2010 and paid upto Rs. 22,10,000 upto 2014 april... After that the builder went almost bankrupt and all his projects were held up... Now in dec 2020 the builder called up and decided to return the money in installments of Rs. 5 lakhs and return a sum of 30 lakhs.
Now the money was given in dec20 jan 21 feb 21 then oct21 dec 21 and jan 22, bifurcated into 2 financial years....
Now when i visited my CA he told me that there is no need to file itr now for the profit of Rs 7.90 lakhs (Rs. 3.95 lakhs each FY) as there is no provision to show money returned from builder in ITR so he told me that when a notice is sent to my father by the IT DEPT then he will give and EXPLANATION to the IT DEPT by scanning the photocopy of the cancel agreement...
Is this correct.. Will my father be in some kind of trouble if he doesn't submit the itr.... He is a retired person with income below 2 lakhs annually and has not file itr since 2013(retirement year) as income is always less than 3 lakhs
Please guide as to what to do next if there is any provision in ITR and ALSO how to save tax if there is any liabilities as the circumstances made both the builder and us to make him return the money.
Thanx in adv
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Money returned from builder against flat
Replies (8)
How do you consider this Rs.790000 amount. interest on 2210000 or compensation for breach of contract
Well the cancel agreement states that a benefit of Rs. 7.90L along with the consideration amount of Rs. 22.10L is paid to the second party ie us....
Income is only taxable and not all incomings
Compensation for breach of contract or agreement is not taxable as per decision given by various high courts , However IT dept. "may" consider it taxable.
Compensation is a gain and hence it is taxable .There are few Supreme Court Judgements which are in favour of IT Dept
Okay but how does one proceed with the ITR for such circumstances.. Please guide
You may declare income under other sources or PGBP based on the judgements and pay taxes accordingly
Sir thank you for helping me out and solving my doubt... A few questions that I still have are.. Do i need to show the scanned copy of cancel agreement in a any case after itr is filed....... And will the IT DEPT ask and question or enquire the builder about how and what happened regarding the taxation..... Kindly reply.... Thanx again
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