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Welcome To New Seminar

Tax Planning of Real EstateAND

Money Making Ideas in Real EstateFor the first time in India a real power packed seminar on

Tax planning of Real Estate as also unique innovative ideasin Real Estate for making your money grow. Stronglyrecommended for all those who are in the real estate sectoras also for all those who would like to join real estate sectoras a business or as investment.

By

SUBHASH LAKHOTIATax Guru: CNBC Awaaz

Director: Lakhotia College of Taxation & ManagementDirector: R.N. Lakhotia & Associates LLP


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Seminar onTax Planning of Real Estate & Money Making

Ideas in Real Estate by Subhash LakhotiaImportant topics to be covered in the Seminar:

1. Real practical objectives of Tax Planning of Real Estate.

2. Real Life tax planning ideas and practical tax saving examples for Investment in Real Estate.

3. Important pointers in Buying, Selling & Renting Properties including Capital Gains tax saving vistas.

4. Important Judicial decisions which help the process of Tax Planning in the wonderland f Real Estate.

5. Money Making Ideas in Real Estate.

6. Utilising Limited Liability Partnership Firms for your Real Estate Investments.

7. The new concept of Real Estate Business Oxygen Company for making money in Real Estate.

8. Investment in India by Non Resident Indians.

9. Miscellaneous aspects of Tax Planning of Real Estate Unlimited Questions & Answers.

Lakhotia College of Taxation & Management

S-228, Greater Kailash Part-2, New Delhi-110 048Phone : 011-29215434, 29215420, 29217768, 9810001665

E-mail : [email protected]& [email protected];[email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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1. Real Practical Objectives of TaxPlanning of Real Estate

1. To achieve best results in Property Buying ,Selling & Renting.

2.To achieve Optimum tax advantages of Tax

benefits and gains by making Investment inReal Estate.

3.To encourage cash rich people to be a partof Real Estate sector.

4. To debate and analyse Judicial thinking for

tax benefit and relief.

5. To think and meditate on Money Making

Ideas in Real Estate.


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2(2) Real Estate Planning Ideas and practicalsaving examples for Investment in Real Estate

Think Boldly :

Yes, I Can

Yes I Will


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2(3)Expand the horizons of Tax Entities in yourfamily for Tax Planning of Real Estate.

1. Jot down on a piece of paper thevarious tax entities that are availableunder the Income-tax Law.

2. Compare with Tax entities existing inyour group right now.

3. Now proceed to think ofNew TaxEntities which can be a part of yourgrowth story.


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2(5) Expanding horizons of new Tax Entities inyour familycontd.

3. It is time to take care of your majorchildren for your Tax Planning.

- The sons and daughters in the familywho are 18 plus.

- Transfer of liquid money to major

children.- Aspects connected with Real Estate

transfer through gift to major

children.


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4. It is time not to ignore your Parents andyour-in-laws to reach out for best fruits

of your Real Estate Investment.

- If not done till now, just start promptly aseparate tax entity in their names.

- Think of investing in Real Estate in theirnames.

- Plan their Real Estate succession

through Will & Gifts.


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5. Think of Real Estate Investments in yourminor children and grand childrens name.

- Plan tax entities of Minors with no Clubbing

of Income if out of their earned income.- Plan through 100% specific beneficiary trustfor minors.

- Plan to have fixed Rental Income for minorchildren.

- Specific Beneficiary Trust for safety and

security of your dear daughter.


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6. Have you planned a tax entity in the nameof your Hindu Undivided Family (HUF)

- HUF is a separate tax entity with basic

Income tax exemption of Rs.1,80,000.- HUF enjoys separate tax deduction forInterest on Residential house property andRepayment of Housing Loans.

- HUF possible even today.

- HUF even without children.

- HUF full Partition & Tax benefits in Real

Estate.


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2(9)Expanding horizons of new Tax Entities inyour familycontd.

7. Other Tax Entities for your Real EstateInvestment

(a) A Tax entity in the form of AJP = ArtificialJuridical Person.

(b) A Tax entity in the form of PartnershipFirm, Limited Liability Partnership, PrivateLimited Company or Public Limited listedcompany.

(c) A Tax entity in the form of an AOP.(d) A Tax entity as a Discretionary Trust

with or without will for investment in Real

Estate.


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3(1) Important points in Buying, Selling & Renting propertiesincluding Capital Gains Tax saving vistas.

(1) Important Points in Buying Real Estate1. Think of the name in which to buy Property.2. Property can be purchased in single or joint

names.

3. Meditate first on the objectives of buying newproperty and then buy out.

4. Always lay special emphasis on Locationonly.

5. It makes a sense to pay little more forPreferred Location Charges(PLC) in longrun.

6. Consider loan as preferred theme of makinginvestments in Real Estate speciallyresidential property for self use.


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3(2) Important points in Buying,Selling & Renting propertiesincluding Capital Gains Tax saving vistas.

( Important Points in Selling Real Estate

1. From tax angle always sell Real Estate after holding it for a period of

36 months so that the gain becomes Long Term Capital Gain with

tax advantages.

2. As certain the fair market price before selling.

3. Meet brokers in the vicinity and advertise in Newspapers.

4. Peep into tax aspects before taking a management decision to sell a

property.

5. Understand the impact of section 50C of the Income-tax Act on your

property sale registration.


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Important Points in Renting Real Estate.1. Ascertain the fair value of your property before

actually renting out your property.

2. Execute a Lease Deed which in particular mustcontain details of Rent increase in the terms ofLease, the penal action for default in payment ofRent.

3. Keep in mind the impact of Service Tax and whowould bear it, let there be specific mention in theLease deed or Rent agreement.

4. Let property use be specified in your Rental

Agreement.


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General principles of Investment in Real Estate :

For optimum INVESTMENT PLANNING of your REAL

ESTATE please stop pause for a moment and

always seeA. The size of the family.

B. The age of different family members.

C. The incomes of different family membersD. To-days Income-tax & Wealth-tax position.

E. New investment impact on Income-tax & Wealth-tax

F. Time available at your disposal


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Tax Saving on Self-Occupied House propertyProperty :- Guaranteed Tax Saving- You can save as much as Rs.45,000 by way of Income-tax.- For Self-occupied house property for the A.Y. 2011-2012

interest on loan deductible upto Rs.1,50,000.Provided :

- Loan after 1.4.1999

- Completion of House within three years fromthe end of the financial year in which loan taken.- Employee can get benefit on submission of

details of interest- Interest loss adjusted against any Income of the

year.


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3(8) Important points in Buying, Selling & Renting properties

including Capital Gains Tax saving vistas.

Let Real Estate be a part of your Financial Planner

It is time to prepare a Financial Planner for every investorby dividing your Investments broadly under following groupsand deciding the percentage of investment as per your family

situation :-

1. Zero risk investment

2. Investment in Mutual Funds

3. Investment in Real Estate

4. Investments in Insurance Policy5. Risky Investment options

6. Jewellery & other Investments

Let Real Estate be a part of your financial planner.


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3(9) Important points in Buying, Selling & Renting properties

including Capital Gains Tax saving vistas.

Real Estate can be your Tax Saver forsection 80C Deduction.

- Claim deduction upto Rs.1,00,000 on Repayment of

Residential Housing Loan.- Payments for Stamp Duty, Registration Fee also

eligible for deduction.

- Payment eligible for installments paid under self

financing or other scheme of any DevelopmentAuthority, Housing Board, Co-operative Society, etc.

- Payment of Amount borrowed from Central or StateGovernment, Bank, Life Insurance Corporation of

India or assessees employer (Corporate entity).


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3(10) Residential Property with Loan- tax gain.

1. Always buy a residential

property with a Loan & enjoyTax benefit.

2. Demarcate Loan and its

payments for tax advantage.


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3(11) Property in Joint Names.

1. Take Property in Joint names of

different family members and save

Income-tax.2. All co-owners enjoy separate tax

deduction even if it is one Property.

3. The Rental Income of Joint Property

is taxed separate as per s.26.


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3(12)Rented out Property purchase with Loan- A tax gain

Entire amount of Interest on

Loan amount is allowed as

a deduction. Even if the net

figure is loss, it is allowedadjustment during the year.


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3(13)Purchase of Business/IndustryProperty with Loan

1. Entire Interest on Loan taken for

Business/Industry property allowed as a

deduction from Business Income.

2. Claim Depreciation & also enjoy deduction

on Interest on Loan.

3. Best buy : Loan and Building and Not Landalone so as to get full Depreciation on full

value.


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3(14) Housing Loan - Interest

1. Interest can be claimed

deduction U/S 24 even if

not paid.

2. Circular of CBDT - No.363

Dated 24-6-1983.


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3(16) Tax benefit on Interest onLoan by Employer.

In the case of Salaried Employees, the benefit of

Interest on Loan as per section 24 would be

granted by employer only if the employee

furnishes a Certificate, from the person to whom

any interest is payable on the Capital borrowed,

specifying the interest payable by the assessee for

the purpose of acquisition or construction of

property.


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3(17) HRA & Rent Payment

1. You can make Rent payment for aresidential house property to your spouse,father, mother, any relative or any person

and enjoy tax benefit.

2. You can enjoy HRA benefit by making rent

payment and you may also enjoy the benefitof interest on loan for residential houseproperty


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3(18) TDS on Rental Income

1. TDS only if yearly Rentexceeds Rs.1,80,000 p.a.

2. In the case of co-owners,

this limit to be appliedseparately for each co-owner.

3(19) Y d R id i l


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3(19) Your second ResidentialHouse

1. Never buy a second ResidentialHouse in your name.

2. You may venture secondresidential house in your name

but with a Loan, a big taxadvantage.

W lth t Y


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3(20) Wealth-tax on YourProperty

1. One Property/500 yd. Plot is exempt from

Wealth-tax without any limit. Aim at this benefit

for all family members.

2. All commercial properties are Wealth tax free.

3. All residential property let out for more than 300days in a year are Wealth-tax free.


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3(21) Gift tax on Properties.

1. No Gift-tax either on donor or donee on

Gift of Properties

2. Now applicability of section 56 of the

Income-tax Act, 1961 w.e.f. 1-10-2009

3. Gift of Properties to Relatives -norestriction.


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3(22) Property in the name of yourDaughter.

1. Adopt planning and give Property to the

daughter preferably through a 100 %

specific beneficiary Trust.2. Separate tax Return and separate

exemption even for Minor Trust receiving

property in a Trust as per Supreme Courts

decision in M.R. Doshi.


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3(27) U t d M I T R id


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3(27) Unaccounted Money, I.T. Raid& Properties.

1. Never use unaccounted money for

Real Estate Transactions.

2. Impact of Income-tax Raid &Survey in Property transactions.

3. Penalty and Prosecution under the

Income-tax Law.

4. Tax Scrutiny-on Real Estate

Transactions

3(28) R l E t t I t t


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3(28) Real Estate InvestmentAbroad

1. Have a deep study of the provisionscontained in FEMA law.

2. Investment permitted for every individual

upto US $2,00,000 every year.3. Think of Investing in USA specially if you

have a relative.

4. Comply with Tax regulations.5. Declare your income in Indian Tax Return.

6. Very bulk cheap Agricultural Land inAfrica.


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3(30) Facing old age blues with


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3(30) Facing old age blues withReal Estate

1. Reverse Mortgage.

2. No Income Tax on ReverseMortgage.

3. No Payment of Interest etc..4. Let your inheritors take

care of your Real Estate.

3(31) U i Id t


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3(31) Unique Idea to preserve yourprimary Residential House.

1. No Loan

2. No Mortgage

3. Keep Title Deed in BankLocker with Joint

operation only. 3(32) T S i C it l G i f


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3(32) Tax Saving on Capital Gains fromResidential House

Long -term C/G for individuals and HUF is fully exempt u/s54 on

transfer of Residential house, if -

A. C/G invested in purchase of a residential house within1 year before or 2 years after transfer or C/G invested inconstruction of a residential house within 3 years oftransfer; AND

B. No sale of such house for 3 years; ANDC. Utilization of C/G by the date for filing of I.T. Return u/s

139 or deposit of unutilized amount as per C/G A/Csscheme by last date of voluntary filing of I.T. Return u/s

139 (1).


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3(35) Tax Saving On Capital Gains by Investment inBonds

Exemption of long -term Capital Gains is possible onInvestment

in certain Bonds - s. 54 EC

(i) Available to all tax payers

(ii) After -1-04-2006 : Investment for section 54 EC can bemade only in Bonds of NHAI & REC with in 6 months.

(iii) Invest in 54EC Bonds by 30th Sept. 2006, if gainsaccrue during the period 29/9/05 to 31/12/05 and by31st December 2006 if accruing from 1-1-06 to 30-6-06.


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3(36) Real Estate Business with No Accounts

As per section 44AD if anIndividual, HUF or PartnershipFirm Carries on Real Estate

Business with no accounts theIncome on PresumptiveBasis would be Calculated @

8 % of the Total Turnover if theTurnover does not exceed Rs.60lakhs. If exceeding Rs.60 lakhs

then Tax Audit required.


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3(37) Agricultural Land

1. Capital Gains exemption onselling Agricultural Land and

buying new Agricultural Land intwo years.

2. Exemption of Capital Gains

regarding shifting of IndustrialUndertakings.54G.


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3(39) Depreciation on Land

No Depreciation on Land forBusiness or Profession,

whether Office Building orFactory Building hence buy

land in the name of separatetax entity and pay Lease Rent.


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3(41) Real Estate Finance

Dynamism in Real Estate Finance1. Think of FDI Funding

2. Selling 5 % Stock at Cost Price OR even

little lower3. Selling the next 10% stock at 10% profit.

4. Developing BBG groups = Bulk Buying

Groups.5. Encouraging UTI concept in Real Estate.

6. Super special Discount to NRI clients and

doing road shows outside India.


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3(43) IT FILE of a Dead Person can be


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3(43) IT FILE of a Dead Person can becontinued.

1. Section 168: Will & executor of a

Will for the estate

2. Separate assessment of executor

of Will apart from ones personal

assessment

3. Rate of tax, etc. like the testator.

3(44) Special new innovative


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3(44) Special new innovativeidea for your WILL:-

It is time to

VIDEO RECORDING

Your Will

- To avoid challenges to the

WILL and safeguard

Real Estate.

4(1) I t t J di i l d i i hi h h l th


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4(1) Important Judicial decisions which help the processof Tax Planning in the Wonderland of Real Estate.

If you want to adoptTax Planning

In Real Estate

Either as aDeveloper or

Investor then

Please keep yourselfUpdated on new and latest Judicial thinking ofthe Judges which will surely kelp you to planbetter.


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4(3) Earnest Money & its Forfeiture

The Earnest Money and Advance Forfeited byVendor is a Capital Receipt says the Supreme

Court of India in the case of Travancore Rubber

& Tea Co Ltd. v. CIT (2000) 343 ITR 158 (SC);hence not liable to tax

- New thinking Madras High Court in the case of

K.R. Srinath v. ACIT (2004) 268 ITR 436

4(5) Construction Amount Paid


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4(5) Construction Amount Paidto a Builder

The Delhi High Court in the case of CIT v. BrindaKumari (2002) 253 ITR 343 has held that where

the amount spent for construction of new

residential house is to be deducted from theamount of capital gain, the amount advanced to

the builder for specific purpose of construction

of flat in the new building would be treated asamount spent by the assessee on such

construction

4(6). Expenditure Incurred for


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4(6). Expenditure Incurred forVacating Hutment Dwellers

The compensation paid by the assessee for

eviction of hutment dwellers from its land was

allowed deduction while calculating the amount

of capital gain. It was held that the expenditureso incurred by the assessee for vacating the land

actually amounted to incurring of an expenditure

for improvement of the asset. This was the view ofthe Bombay High Court in the case of CIT v. Miss

Pooja C. Patel (2000) 243 ITR 582


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4(7). Land & Building Bifurcation

Where a consolidated PRICE is paid for two CapitalAssets, the price can be bifurcated

- Rajasthan High Court in the case of CIT. v. Vimal Chand

Golecha (1993) 201 ITR 442.- Kerela High Court in the case of CIT v. Smt. Lakshmi B.

Menon & Another (2003) 264 ITR 76.

- Madras High Court in the case of CIT v. T.C. Itly Ipe (2001) 249

ITR 591.- Madras High Court in the case of CIT v. Dr. D.L. Ramachandra

Rao (1999) 236 ITR 51.

4(8).Capital Gains Taxable on the


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(8) pbasis of Agreement

When a document shows a fixed price, there will be a

presumption that that is the correct price agreed upon by theparties. It is not necessary that the price stated in theagreement will be the price shown in the sale deed.Sometimes, it may be higher and sometimes it may be lower.

Sometimes intentionally a lesser value may be shown in thesale deed. Even if it is assumed to be so, unless it is provedthat the agreement was acted upon and unless the amountstated in the agreement was paid for the sale, the courtcannot come to the conclusion that the price mentioned in thesale deed is not correct.- Kerala High Court in the Case of CIT v. K.C. Agnes & Others(2003) 262 ITR 354

4(9) Capital Gain or Profit on Adventure in the


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4(9). Capital Gain or Profit on Adventure in thenature of Trade on selling a Plot of Land

Sale of a PLOT assessable as Capital Gain &not Speculative Trade or Business

- M.P. High Court in CIT. v.

Smt. Saraswati Bai Jaiswal (2003)264 ITR 366

4(10) Cost of Construction accepted


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4(10).Cost of Construction accepted- No Subsequent Reopening

When the cost of construction is acceptedsubsequent reopening of tax Assessment is not

permissible

- M.P. High Court in the case of

CIT v. S.R. Construction (2002)257 ITR 502

4(11) Additions for understatement of


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4(11). Additions for understatement ofSale Value of flats without evidence

The addition made by the Assessing Officer in thecase of Civil construction on ground of

understatement of Sale Value of flats but the Tribunal

found that the I.T. Department had not established its

case; hence as there was no evidence, the addition

was deleted.

- Madras High Court in the case of K. Manikam v.CIT (2002) 258 ITR 175

4(12) Cost of Construction as per


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4(12). Cost of Construction as perRegistered Valuer

Cost of Construction as per RegisteredValuer to be accepted and no addition can

be made under section 69 B.- Income-tax Appellate Tribunal,

Hyderabad Bench in the case of

ACIT v. Vinod Kumar Agarwal

(2002) 257 ITR 65 (AT)


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4(14) Dissolution of Firm & Non-


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4(14) Dissolution of Firm & NonDistribution of Capital Assets

No Capital Gains arise on Dissolutionof Firm if no Distribution is effected of

Capital Assets.- Karnataka High Court in the

case of CIT v. Mangalore Ganesh BeediWorks (2004) 265 ITR 658

4(15) Valuation of Closing Stock


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4(15) Valuation of Closing Stockat just 10% of cost

It may be possible to value yourClosing Stock at just 10 percent ofcost and this would not call for anyaddition to the total income.

- Bombay High Court in the

case of Alfa Laval India Ltd. v.DCIT (2004)266 ITR 418

4(16) Identity of Shareholders &


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4(16) Identity of Shareholders &Cash Credit Addition

(A) Cash Credit addition of Share Capital not

justified where identity of shareholders

is established.- ITAT, Delhi in the case of Skyhigh

Properties Pvt. Ltd. v. ITO (2002) 258 ITR

98 (AT)

(B) Share capital by poor farmers is taxable-

Bhola Shankar Cold Storage Pvt. Ltd. v.ICIT (2004) 270 ITR 487 (Cal. H.C.)

4(17) P t J i t V t


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4(17) Property Joint Ventures

1. Business Income or Capital Gain- P.M. Mohammed Meerakhan v. CIT(1969) 73 ITR 735 (S.C)

2. Understand the meaning of Venture

- CIT v. Smt. Minal Rameshchandra

(1967)167 ITR 507- Raja J. Rameshwar Rao v. CIT (1961)

42 ITR 179 (S.C)

4(18) Provision for Warranted


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( )Liability

1. Estimate of Accrued liability to bedischarged at a future date

- Supreme Court of India in the case ofCalcutta Co. Ltd. v. CIT (1959) 37 ITR 1

2. Provision for meeting Warranted

Liability is tax deductible

- Kerala High Court in CIT v. Indian

Transformers Ltd. [2004] 270 ITR 259

4(19)I f Pli thG d


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4(19)Income from PlinthGodowns

Monthly income from Plinth Godowns

for storage of commodities is Business

Income and not income from HouseProperty

- MP High Court in the case o

Babulal Agrawal v. CIT (2005) 272

ITR 454

4(20). Payment to Corporation for


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( ) y p

Infringement of By-Laws.

Payment of Rs 4 Lakhs paid toCorporation for infringement ofBye Laws allowed

-consideration for getting theRevised Plan sanctioned

- Delhi High Court in the caseof CIT v. Loke Nath & Co.(Construction) 147 ITR 624

4(21) Purchase / Construction of New


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4(21) Purchase / Construction of NewResidential House to Save Capital Gains

Under a Joint Development Agreement,the assessee gave property to aBuilder for putting up flats. Under the

agreements eight flats were to be putup on the property and four flats werethe share of the assessee. Held, that

these four flats constituted aResidential House as per KarnatakaHigh Court in the case of CIT v. Smt.K.G. Rukminiamma 331 ITR 211.

4(22) Firms Immovable Property and


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( ) p y

Partners.

The whole concept of Partnership is toembark upon a joint venture and, for thatpurpose to bring in as Capital, money or evenproperty including immovable property.

Once that is done, whatever is brought inwould cease to be the exclusive property ofthe person who brought it in - it would be

the trading asset of the partnership in whichall the partners would have interestproportion to their share in the business ofPartnership CIT v. Kedarnath Poddar & Co.

201 ITR 639

4(23) Interest on amount Borrowed


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( 3) te est o a ou t o o edfor Purchase of Property

Interest on Loan paid forpurchasing property will

have to be included whilecalculating the cost of

acquisition of the assetCITv. Sri Hariram Hotels Pvt. Ltd.,

325 ITR 136 4(24) No Penalty for furnishing inaccurate

V l ti th b i


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Valuation on the basisof Valuation Officers Report.

Where the assessee enclosedRegistered Valuation Report in supportof Capital gain, it was not accepted bythe Assessing Officer who made theAssessment of Capital Gains on thebasis of District Valuation OfficersReport, it was held that it did not

amount to furnishing of inaccurateparticulars and penalty under section271(1)(c) not leviable Dilip N. Shroff v.CIT 291 ITR 519 (sc).

4(25) Purchase of Flats which were combined tok R id ti l U it lid f l i i


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make one Residential Unit valid for claimingtax exemption under section 54

1. Karnataka High Court in the case of CIT V.D.Ananda Basappa 309 ITR 329 held that purchaseof two flats which were combined to make oneResidential unit would be eligible for granting

exemption under section 54 of the Income-taxAct, 1961.

2. Transfer of Residential house & purchase of

four flats in the same Residential Building -Assessee entitled to exemption u/s 54.

- CIT v. K.G. Rukminiamma 331 ITR 211.


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4(30) Purchase of four portions of property


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( ) p p p yby four sale deeds and tax exemption.

Purchase of four portions of property byfour sale deeds would be valid to saveCapital Gains because properties

constituted one single unit. Held, thatexecution of four different sale deeds inrespect of four different portions of the

property did not materially affect the natureof the transactions or the nature of theproperty acquired CIT v. Sunita Aggarwal284 ITR 20

4(31) Sale of Residential House andi t t i H P i


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investment in new House, Possessionreceived but Registration not completed.

In order to attract the application ofsection 54F, it is not necessary that

the new house should beRegistered in the name of theassessee. Section 54F speaks of

purchase and Registration is notimperative CIT v. AjitsinghKhajanchi. 297 ITR 95.

4(32) Deduction of Expenses incurred in


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( ) pconnection with transfer

Expenditure incurred on obtainingProbate, Travel expenses of Executorsand expenditure incurred on evicting

illegal tenants held to be expenditureincurred wholly and exclusively inconnection with Transfer and hencedeductible June Perrett v. ITO 298 ITR268

4(33) Short-term or Long-term


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( ) gCapital Gain.

Where the assessee was inpossession of Property underAgreement of sale entered in 1976,

sale deed executed in July, 1986and Registered on 26-9-1986,Property sold on 30-9-1986, theCapital Gain would be long-termCapital gain as the assessee heldthe property from 1976 - MadathilBrothers v. DCIT 301 ITR 345.

4(34) Incometax Exemption under


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( )section 54F.

Where the assessee established investment ofentire Capital gain in purchase of Land within thestipulated period but construction of the housewas not completed, the assessee was entitled to

exemption. Held, that in order to get the benefitunder section 54F of the Act, the assessee neednot complete the construction of the house andoccupy it, it was enough if the assesseeestablished the investment of the entire netconsideration within the stipulated period CIT v.Sardarmal Kothari & Others 302 ITR 286.

4(35) Agricultural Land & Tax


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( ) gExemption

1. Agricultural Land sale No Capital Gains even ifAgricultral Income not shown in Income-taxReturn CIT v. Debbie Allmao 331ITR 59.

2. Agricultural Land sold and new land purchased

in sons name still benefit of deduction u/s 54Bgranted CIT v. Gurnam Singh 327 ITR 278.3. Report of Tehsildar that land was beyond eight

Kilometres from Municipal limits, hence gainsarising from such transfer not taxable CIT v.

Lal Singh 325ITR 588.4. Sale of Agricultural Land & Investment in

purchase of New Land in assessees sonsname as co-owner, entitled to tax deduction u/s

54B CIT v. Gurnam Singh 327 ITR 278

4(36) Family Arrangement


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4(36) Family Arrangement

When parties enter into a familyarrangement for rearrangingshareholding of the members toavoid possible litigation amongthemselves, this does not amount

to transfer and is not eligible toCapital Gains Tax CIT v. Kay ArrEnterprises & Others 299 ITR 348.

4(37) Adventure in the Nature of Trade


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4(37) Adventure in the Nature of Trade

Delhi High Court decision in thecase of CIT v. B.K. Bhaumik 245ITR 614 The expression

Adventure in the Nature ofTrade relates to the existence ofcertain elements in the

adventure which in law wouldinvest it with the character oftrade or business.

4(38) No payment of Stamp Duty for


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transfer, hence s.50C not applicable.

The guideline value is notconclusive proof. Section

50C is applicable in cases ofpayment of Stamp Duty for

Transfer Asst. CIT v. V.N.Meenakshi 319 ITR 262 (AT).

Documents

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