Respected Sir / Madam,
One of my clients had a property which he co-owned with his parents. Though the ratio of ownership was not mentioned in the Builder-Buyer Agreement, he had the details of cost of acquisition contributed by each of the co-owners.
However, when this property was sold (my clients being confirming party in Tripartite Agreement between Builder, Buyer & my Co-owners Clients as registration was not done by clients after allotment by builder after possession), the sales consideration was paid in a different ratio & TDS deducted accordingly.
Now while filing ITR, for LTCG on sale of such property,
(1) Sec-194-IA is applicable for transferor & transferee, and here the transferor is Builder & transferee is Buyer then why TDS deducted on client's sales consideration? Is there any exception to Sec-194-IA?? Though I have claimed Self-occupation benefits during filing ITRs of my clients as per Sec-27 Deemed ownership as possession was given by builder to my clients.
(2) Should we show sales consideration which the buyer paid to co-owners & TDS deducted u/s-194-IA OR apportion the sales consideration on the basis of ownership (investment cost) of each co-owners?
(3) COA should be indexed separately for each co-owners OR apportion the total COA in the ration of sales?
As per law, Sales consideration & COA should be in the ratio of ownership (cost of investment) to compute correct LTCG but to apply the provision of laws now, will my client receive any notice from IT Department in future as sales consideration will mismatch as per Form 26AS & Form 26QB?
Please advise.
CAclubindia
