Tax Help Please!

Really a serious problem.

Can you please tell me the full form of REC bonds ??

Mr.Sid

Please provide the recital in the sale deed.  Is there any condition that the sale will be completed i.e. the title in the property will be transfered only after realization of the cheque. Section 45 of Income-tax Act, says --

Any profits or gains arising on transfer of a capital asset effected in the previous year shall, save otherwise provided in sections 54, 54B, 54D, 54E, 54EA,54EE,54F,54G, and 54H, be chargeable to income-tax under the head income from capital gains, and shall be deemed to be the income of the previous year in which the transfer took place.

Hence it is important to know whether the transfer is effected or not?  If the transfer is effected even though the full sale consideration is not received it is a difficult case.  Any how the  courts may take a liberal view not to tax the income which is not really received and which is in litigation.

But the assessing officer may not help in any way, as he is bound to follow the section?

There is a case law  K.P.Verhese Vs. ITO  131 ITR  597 (SC)  where the court held depending upon the facts of the case the language in the section may be modified in favour of the assessee.   Ir is also a case regarding capital gains but the facts are different.

We can take the ratio of that case 131 ITR 597 (SC) for our help here in this case.

Please go through the recital in thesale deed carefully. Please study the case law 131ITR597(SC) carefully.

Best Wishes

Sathikonda