Transfer of property through gift deed.

This query is : Resolved

subhash sharma (Querist)
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04 November 2013 HI ONE OF MY CLIENT(RENU) HAS GOT AN NOTICE FROM INCOME TAX DEPTT U/S 143(2) FOR A.Y. 2011-12 ALLEGING THAT (RENU) HAS DEPOSITED RS. 21 LACS IN HER SAVING BANK ACCOUNT. SOURCE OF MONEY WAS ASKED BY THE INCOME TAX DEPTT.

MY CLEINT (RENU) GOT THE LAND FROM HER FATHER IN LAW ON HERE MARRIAGE BY GIFT DEED ONLY NO STAMP DUTY WAS PAID FOR GIFT DEED. NO SALE DEED WAS EXECUTED BETWEEN RENU AND HER FATHER IN LAW.

MY CLIENT HAS GIVEN THE REPLY TO ITO THAT SHE HAS EXECUTED AN AGREEMENT WITH A FARMER (JAGJEEVAN) TO SALE THE AGRICULTURE LAND. SHET GOT RS. 21 LACS FROM THE LANDLORD AND DEPOSITED IT TO HER SAVING BANK ACCOUNT.

PLEAS ADVISE.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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05 November 2013 Under the Transfer of Property Act, immovable property has to be registered in the name of the owner. Mere possession of immovable property is not proof of ownership.

From the details provided, it appears your client has not registered the land in her name.

However, in her I.T. Return, has she been showing this land as her asset. If she has then there is no problem. But if the land is not being shown among her assets, the question will arise as how and when she acquired the purported agricultural land she sold to farmer Jagjivan.

Subject to the disclosure of agricultural land as her asset, the reply sent is satisfactory.

Certain other facts should also be known for framing a proper reply to the query, so that the provisions of Section 69 .... of the IT Act, 1961 are not applied.

When was the marriage of your client solemnised. If 6 years have elapsed, then the fact that there is a valid gift deed, would prevent the IT authorities from re-opening the assessment, since IT authorities can go back only for the last 6 assessment years and not more.

In case the agricultural Land has not been shown as your assessee's asset, then the ITO can add back Rs.21 lakhs as Unexplained Investments.