27 December 2019
Reply by: CA R SEETHARAMAN (Expert) 25 December 2019
5000 is the purchase price and valuation officer price 7000, so difference of 2000 will be chargeable to income-tax under the head Income from other sources. No tax payable on gift to son.
Dear Sir , Require further clarifications:
1. My client has gifted to his son only 50% of initial payment (that is 50% of booking amount of the shop) & his son paid balance payment of his portion directly to builder. whether Rs.1,000/- will be chargeable to income-tax under the head Income from other sources to his son. Please advise us.
2. Can AO refer for valuation of the above shop on the agreement to sell (1st October, 2015) to Valuation Officer & consider the value for determining income under the head Income from other sources. As per illustration valuation is Rs.5,200/- (Rs.5000 is the purchase price and valuation officer price 5,200/-, so difference of 200 will be chargeable to income-tax ). Is case of Ms. Balmer Lawrie Van Leer Ltd. Vs ACIT (ITAT Mumbai) help in this regard. Please advise us. Regards, Thanking in advance, K M Goyal (FCA) M No.: 9899799000
Original letter:
Dear Sir, My Client is an individual, he has made an agreement to purchase/sale of a commercial shop with a builder, and details of the agreement are as following: 1. Paid 10% of purchase consideration as advance through account payee cheque on the date of above agreement. 2. Date of agreement was 1st October, 2015. (Amount in Rs. per Sq. Feet) Particulars Date (on) Purchase Price circle rate Valuation Officer
Agreement to purchase/sale 1st Oct, 2015 5000/- 7,000/- 5,200/-
Gifted 50% of his share to his son (i.e. 5% of purchase consideration) 1st July, 2017 - 8,000/- 6,000/-
Balance 45% payment made to builder by the individual 2018 & 2019
Balance 45% payment made to builder by his son from their own sources. 2018 & 2019
Registration of this shop was executed in joint name 1st Nov, 2019 - 9,000/- 7,000/-
3. Purchase price was settled @ Rs. 5,000/- per Sq. feet. 4. Stamp duty value (circle rate) on 1st October, 2015 was Rs.7,000/- per sq. feet. 5. Value assessed by Valuation Officer on 1st October, 2015 was Rs.5,200/- per sq. feet. 6. He has gifted 50% of his share to his son on 1st July, 2017 (i.e. 5% of purchase consideration) & after completing the formalities, the builder enter the name of his son in the agreement. Now both names are appearing in the agreement. 7. Stamp duty value (circle rate) on 1st July, 2017 was Rs.8,000/- per sq. feet. 8. Value assessed by Valuation Officer on 1st July, 2017 was Rs.6,000/- per sq. feet. 9. Balance payment made to builder by the individual (45%) & by his son (45%) from their own sources in the year 2018 & 2019. 10. Registration of this shop was executed in joint name on 1st November, 2019 & circle rate on that date was Rs.9,000/- per sq. feet. 11. Value assessed by Valuation Officer on 1st November, 2019 (date of registry) was Rs.7,000/- per sq. feet. Kindly advice whether any income chargeable to income-tax under the head Income from other sources or under any other head to the following persons for their 50% share each in the shop: a. The Individual. b. His son. Regards, Thanking in advance, K M Goyal (FCA) M No.: 9899799000
28 December 2019
1 Difference of 200 fully chargeable in son's hands. 2 Difference of 200 will be chargeable to income-tax ).as in the case of Ms. Balmer Lawrie Van Leer Ltd. Vs ACIT (ITAT Mumbai).
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