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Tds & gain related query

Tax queries 185 views 1 replies

Assessee sold a piece of Land Say for Rs. 5500000/- to ‘X’ & documents were registered & executed with sub registar in the month of February 2018.  X deducted tax @ 1% i.e. 55000/- & deposited to Government Treasury.

The ‘X’ (purchaser) failed to pay the Purchase Consideration & as per  mutual consent of both the Parties, applied to Court for Cancellation of deed in September 2018. The matter is still Sub judice in the Court.

Kindly let us know:- 

(a) Whether Assessee should consider the Gain/Profit in his I.T. Return for A.Y. 2018-19?

 (b) Who will claim Refund of TDS?

(c)  Auditor”s Resposibility?

Replies (1)

If sale of property is under development agreement then no assessee shall not charge the gain to tax until entire consideration is received.

Second option, Applying revenue recognition principle assessee may not charge same gain as income.

Since you are not offering income as gain hence no TDS refund and TDS return shall be revised.

Auditor needs to specify facts of the case in his audit report exclusively.


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