TAX TALK-19.12.2011-THE HITAVADA

TAX TALK-19.12.2011-THE HITAVADA
TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant)
“RECEIVED NOTICE FOR ARREARS OF DEMAND!”
Query 1]
I have received arrear demand for the A.Y. 2002-2003 wherein the certain points as mentioned below were mentioned:
· The amounts mentioned as outstanding demand(s) are liable to be adjusted against the refunds arising on processing of return in CPC. This may be treated as intimation u/s 245 of the Income Tax Act, 1961.
· Please contact your current jurisdictional Assessing Officer for any clarifications on the Demand(s) stated in this intimation.
· Any rectification/correction of the demand can be made only by the Assessing Officer. CPC cannot carry out any modifications to the above demands nor can it clarify issues regarding these demands.
· In order to know your current jurisdictional Assessing Officer (AO) you may log on to http://www.incometaxindiaefiling.gov.in and click on “Know Jurisdiction” under “SERVICES”.
This is for the financial year 2001-2002 when arrear was paid due to pay revision.
In all the previous year IT returns, I have submitted the bifurcation sheet u/s 89 at the time of filing the return. After a period of 8-9 years, IT Department is demanding arrear amount. I am also transferred to Chandrapur from Bhopal. How to settle the issue? [s_c_swami@yahoo.com]
Opinion:
As of now, you don’t have any option but to make an application to your current jurisdictional assessing officer intimating the facts & figures, along with relevant documents/records, of the case to carry out the necessary rectifications. Admittedly, it will be a cumbersome process as the demands pertains to F.Y. 2001-02 & also there is a change in your Assessing Officer from Bhopal (Madhya Pradesh) to Chandrapur (Maharashtra). We understand the genuine hardship & problem that the tax payer may be facing as a result of the old demands. The Assessee might be facing the inconvenience due to the transitional phase of the I.T. Department from manual to e-era environment. However, wherever the demands or any communication is received from the Income Tax Department, the taxpayers are advised to take it seriously and should immediately comply to avoid the complications/ complexity like this in future.

Query 2]
I have a query on investment made from capital gains and request your advice on the same.
I was willed an ancestral property which I sold in September-2008. The capital gains so realized were invested in NHAI Bonds (Rs. 50 Lacs) & the balance was invested in construction of a residential accommodation in the stipulated time. The new accommodation has been registered in The Registrar's Office. The new accommodation has been designed and constructed in a manner that two identical & independent units can be obtained from it. I am keen to provide my only sister and her family with one such part so that the same is in her name. The other part I will use for myself and my family. My queries are as under:
1. Can I do this without going through the formalities of a WILL to be made by me?
2. Can I gift the portion to her, without any Gift Tax or any other cess?
3. Your advice on how this transfer can be done legally?
I await your reply. I may inform you that the property is located in Bareilly (U.P).
[kmpant@yahoo.com]
You will be doing a noble task and the Income Tax Act doesn’t have any provision to tax the above transactions. There will not be any Income tax / Gift Tax on the above transactions. You can do so by executing a registered Gift Deed.
For General Readers:
Our other readers may note that whenever any asset is purchased on the basis of which capital gain exemption is claimed u/s 54, 54B or 54D, 54G, or U/s 54F, it should not be sold within a period of 3 years of its acquisition. If it is sold within a period of 3 years, the exemption granted earlier would be taken back.

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