Capital gains

This query is : Resolved

G Muralidharan (Querist)
Follow

29 June 2012 One of my client has availed reverse mortgage from a bank. Now he wants to dispose off the property. Now my querry is while selling the property, can we deduct amount involved in the settlement of Reverse mortgage charges as they are incidental to sale

G Muralidharan

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

29 June 2012 No. The loan against property can not be considered to be incidental to SALE. Reverse mortgage (or by whatever name called) is a loan. Liability is deductoble under WEALTH TAX and not under income.

gbalakrishnan

gbalakrishnan (Expert)
Follow

29 June 2012 yes, that provision is not reasonable, as the sale itself is a product of mortgage. there is no law in place that allows any arbitrary action of government. so muralidharan can file a writ under art 226 for necessary relief under certiorari he can get order of court to set aside that income tax provision.
incidentally all CAs need to protect their clients from arbitrary laws, after all CAs are professionals if in practice. see CBDT the other day issues a notfn that if tax is less than rs.3 lacs there need not be appeal to be admitted by CIT(A) that notification is arbitrary that such notification are ultra vires Art 14 of the Costitution sir tks

Upgrade to CAclubindia Pro. Subscribe Now!

gbalakrishnan

gbalakrishnan (Expert)
Follow

29 June 2012 CAPITAL GAINS TAX IS A LOOT SO PEOPLE AVOID IN VERY MANY DEVIOUS WAYS. SEE TODAY IN TAMIL NADU REGISTRATION OFFICES SHOW YOU A WAY OUT BY BRIBES,WHY AS LONG TERM OR SHORT TERM CAPITAL GAINS TAX IS JUST ARBITRARY. OTHERWISE WHY PEOPLE DO, SIR.
SO PEOPLE HAVE TO MOVE CONSTITUTIONAL COURTS THAT TAX IS ARBITRARY AND NEED TO BE STRUCK DOWN THAT MAY BE POSSIBLE BY JUDICIAL REVIEW, AS VK SABHARWAL CJI STRUCK DOWN IN 2007 THE SCHEDULE IX IN IE COELHO V/S T N. SO PEOPLE NEED TO TAME IRRATIONAL TAXING PLS THAT IS WHERE PROFESSIONALS HAVE TO WORK TO STEM THE ROT SIRS!