Latest news with #AO
News18
2 days ago
- Business
- News18
ITAT Verdict: Capital Gains Exemption Under Sec 54 Allowed On Property Gifted By Spouse
Section 54 of the Income Tax Act offers exemption from long-term capital gains tax if the profit from selling a residential house is reinvested in buying another residential property within 2 years, or used to construct a new one within 3 years from the date of sale. The above verdict pronounced by the Income Tax Appellate Tribunal (ITAT) Mumbai came following the appeal of Kavita Manoj Damani. Her claim for long-term gain exemption was rejected by the Income Tax Officer (AO), calling it as a 'tax avoidance attempt'. Even the Commissioner of Income Tax (Appeals) sided with the AO. So, she was forced to knock on the doors of the Income Tax Appellate Tribunal (ITAT) Mumbai to get the tax relief as per rules and process. The case revolves around a Powai property jointly purchased by a couple in 2002, as per Live Mint report. In 2017, the husband gifted his 50% stake to his wife. She sold the entire property in 2020, earning a long-term capital gain of Rs 4.21 crore. To claim exemption under Section 54, she bought a flat from her husband for Rs 3.85 crore and paid Rs 11 lakh in stamp duty—totaling Rs 3.96 crore. Though AO rejected her claim. The Live Mint report said that the tax officer believed her husband was the real owner, and she didn't pay for the original flats. The Assessing Officer initially denied the exemption, arguing that the sale was a sham meant to transfer capital gains back to the husband. The Commissioner of Income Tax (Appeals) also sided with the AO. However, ITAT Mumbai ruled in favour of the wife, stating that the sale was genuine. She had paid through banking channels, registered the deed, reinvested within two years, and deducted TDS. The tribunal clarified that the relationship between the buyer and seller is irrelevant under Section 54 if the transaction is authentic. However, the tribunal looked at the matter from a fresh perspective. It noted that the property was legally gifted in 2017 and so the new property was bought within the allowed 2-year window. Moreover, the legal process including full payment and stamp duty were done properly. The tribunal in its verdict accepted the deal as a legally valid and allowed the claimant to take the benefits under Section 54. What This Means for You You can claim Section 54 exemption on capital gains from property gifted by your spouse. But you must complete the purchase of a new property within 2 years of selling the old one. Use a proper gift deed to transfer ownership.
Mint
4 days ago
- Business
- Mint
Mumbai court allows capital gains tax exemption to woman who bought flat from her husband
When you sell a house, you can claim exemption from capital gains tax by reinvesting the profit in another residential property. This is allowed under Section 54 of the Income Tax Act. In Mumbai, Kavita Damani followed this rule by using ₹3.96 crore from the sale of a property to buy a flat from her husband. However, the assessing officer (AO) rejected her claim for tax exemption, arguing that the reinvestment wasn't genuine and that the transaction was merely a way to transfer the capital gains to her spouse and not a real purchase. However, the Mumbai Income Tax Appellate Tribunal (ITAT) ruled in Kavita's favour and allowed her the exemption under Section 54. What was the case? Kavita Damani and her husband Manoj Damani had jointly purchased two adjacent flats in Powai in March 2002. In April 2017, the husband gifted his 50% share to her, making Kavita the sole owner. In January 2020, she sold the flats for ₹5.98 crore, earning long-term capital gains of ₹4.21 crore. She then purchased a flat in Lodha Estella from her husband in March 2021 for ₹3.85 crore and paid ₹11.55 lakh in stamp duty to claim a total of ₹3.96 crore in exemption from capital gains tax under Section 54. She made the entire payment within the stipulated deadline under Section 54. However, the assessing officer denied the exemption on the grounds that the reinvestment in property was not a genuine transaction because it was bought from the spouse. The AO's argument was that Kavita had failed to prove her own contribution in the original Powai flats and that her name was included only nominally. Hence, the capital gains from the Powai flats should be taxed in her husband's hands, as per the clubbing provisions under Section 64. The ₹3.96 crore gains were added to her taxable income. The Commissioner of Income Tax (CIT Appeals) upheld the AO's findings, after which Kavita approached the ITAT. The ITAT, on reviewing the case documents, ruled that Kavita was indeed the sole legal owner of the Powai flats after the 2017 gift deed. The capital gains on the sale of the Powai flats were credited to her bank account and all disclosures were made in her income tax return. Naveen Wadhwa, vice president at Taxmann, said the court noted that irrespective of the fact that the details of the payments made while purchasing the Powai property in 2002 were not available, the husband had gifted his rights in the property to Kavita. True owner 'By virtue of the said gift, Kavita had become the owner of the said property. The court further noted that tax on the rental income earned from the property was also fully paid by Kavita from the day on which the husband of assessee gifted her share to the assessee," he explained. This reasoning established Kavita as the real and economic owner of the Powai property. The next question was whether the Lodha flat purchase was genuine because it was bought from her husband. Sujit Bangar, founder of Taxbuddy, said the ITAT considered the transaction genuine on four key grounds. 'One, Kavita paid her husband through a bank transfer, establishing a genuine payment trail. Second, a sale deed was registered. Third, she transferred the gains within two years, which is the requirement under Section 54. Last, she deducted TDS on the sale amount and deposited it with the government," Bangar said. Since Kavita met all the legal and tax requirements, the authenticity of the transaction took precedence over the relationship between the parties. 'The court observed that the relationship between the purchaser and seller is not relevant and there is no restriction on purchase of the residential property from the spouse for 54 exemption," Wadhwa said. Section 54 exemption between relatives This case shows that the Section 54 exemption can be claimed even in transactions between relatives provided the eligibility criteria are satisfied: a) the capital gains are reinvested in a residential property, and b) within two years, or three years if the property is being constructed. It is important that both the relatives maintain genuine transactions and proper documentation. However, there are still costs to bear. The buyer will need to pay stamp duty, though they are allowed to include stamp duty as part of cost of acquisition and investment for exemption under Section 54. The seller needs to pay tax on the capital gains made by selling the property since it's not a gift. Bangar said in the case of Kavita, since she has actually paid her husband, capital gain provisions will apply in her husband's hands. 'If the difference between the purchase and sale price is minimal, it can be advantageous for the spouses," Bangar explained. Prakash Hegde, a Bengaluru-based chartered accountant, said such transactions carry convenience value. 'The property and control over it stays within the family," Hegde said. He added it can be beneficial in specific cases such as when the husband reinvests the gains in tax-saving bonds or the capital gains liability in his hands is minimal after indexing the cost of the acquisition. Relatives can execute the sale based on the circle rate, even if the market value is higher, which helps reduce the capital gains tax liability for the seller. The stamp duty in such cases will also be lower as it is paid on the ready reckoner rate or the actual sale consideration, whichever is higher.
Time of India
5 days ago
- Business
- Time of India
Indian engineer wins Rs 69-lakh unexplained investment income tax case in ITAT Mumbai on these technical grounds
Academy Empower your mind, elevate your skills How did this unexplained investment case under Income Tax Act, 1961 start? FY 2014-15: An engineer working in Dubai, UAE purchased a property in Kerala for Rs 39 lakh (Rs 39,62,714) and booked an FD worth Rs 30 lakh (Rs 30,36,720). An engineer working in Dubai, UAE purchased a property in Kerala for Rs 39 lakh (Rs 39,62,714) and booked an FD worth Rs 30 lakh (Rs 30,36,720). April 20, 2022: The tax assessing officer (AO) issued a notice under Section 148 and re-opened his tax file. The tax assessing officer (AO) issued a notice under Section 148 and re-opened his tax file. May 11, 2022: The engineer filed an income tax return (ITR) in response to notice issued under Section 148 declaring income of Rs 5,85,620. The engineer filed an income tax return (ITR) in response to notice issued under Section 148 declaring income of Rs 5,85,620. March 11, 2023 to April 21 of 2024: The tax department issued him statutory tax notices under Section 142 (1) The tax department issued him statutory tax notices under Section 142 (1) March 15, 2024: The engineer filed part reply to these tax notices and therefore a show cause notice was issued and served upon him. He failed to avail the opportunity of filing submissions/explanations in response to these show cause notices. The engineer filed part reply to these tax notices and therefore a show cause notice was issued and served upon him. He failed to avail the opportunity of filing submissions/explanations in response to these show cause notices. March 31, 2024: The case was getting time barred and since the engineer did not defend his case, a best judgement order under Section 144 imposing Rs 69 lakh income as unexplained investment under Section 69 was added to his income and accordingly penalty proceedings were also initiated against him. What did the taxpayer explain about 'unexplained investments'? The Assessee being non-resident and working in Dubai, UAE from which he had made direct remittance for purchase of property in Kerala and the money transfer receipts and all the relevant documentary details were already provided; Since the income had never accrued or arisen in India the investment in property cannot be termed as unexplained investment u/s 69 of the Act. Fixed deposits of Rs 30,36,720 were made from maturity of old fixed deposits, because, since 1997 the Assessee has been staying in Dubai and working as an engineer and earning salary. The savings in fixed deposits held in India are old and being matured and reinvested during the current year and the bank statements highlighting the same were already provided. These four grounds of appeal were raised in ITAT Mumbai 'On the facts and circumstances of the case and in law, the ITO, Ward 34(3)(5), Mumbai was not having the jurisdiction over the appellant as he was a non-resident during the year and, therefore, he has erred in passing the order under Section 148A(d) and also issuing the notice under Section 148.' ' On the facts and circumstances of the case and in law, the ITO, Ward 34(3)(5), Mumbai has erred in passing the order under Section 148A(d) and also issuing the notice under Section 148 without appreciating that he was not having the jurisdiction for the same in view of Section 151A and the notification issued thereunder notifying e Assessment of Income Escaping Assessment Scheme, 2022 and, thereby, rendering the said order and the notice as well as the entire assessment proceeding as null and void.' 'On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in passing the assessment order under Section 143(3) r.w.s. 144C(3) beyond the time limit provided for completion of the assessment under the provisions of Section 153.' 'On the facts and circumstances of the case and in law, the Ld. Assessing Officer erred in adding an amount of 36,12,173 under section 69 of the Act being the purchase price paid by the appellant for acquiring a property at Kerala, without appreciating the fact that the said payment was done in the earlier years and not during the assessment year under consideration.' What did ITAT Mumbai say? Here's what exactly the ITAT Mumbai said: 'We have noticed that in the order under Section 148A clause (d) dated 20.04.2022, the AO has acknowledged the response to the notice by the Assessee that he was NRI for the relevant year. Therefore, it is not the case of the Revenue that the AO who has issued the impugned notice under Section 148 was not aware that the Assessee was NRI for the relevant year.' 'Thus, we are of the considered opinion that in the arguments of the Ld. D.R. (tax department's lawyer) wherein he has tried to invoke Section 292BB, because of the above discussion and the judicial precedent relied on by the Ld. A.R., there is no merit found in the arguments from applicability of section 292BB in the case of the Assessee (engineer).' 'Further, in view of the findings of the High Court in the case of Nimir Kishore Mehta (supra) the AO who had issued the notice under Section 148 was not having jurisdiction on the case of the Assessee.' 'Therefore, the issuance of show cause notice under Section 148A(b), passing of the order under Section 148A(d) and subsequent issuance of notice under Section 148 by the AO in this case are held to be carried out without having jurisdiction over the issue and the said proceedings are bad in law and accordingly liable to be quashed. Accordingly, ground Nos.1 &2 are decided in favour of the Assessee.' What might be some key legal takeaways from this judgement? On June 27, 2025, an Indian engineer , who had been working in Dubai, United Arab Emirates since 1997 won a case of Rs 69-lakh unexplained investment under Income Tax Act, 1961 on technical grounds. The engineer had bought a property in his hometown in Kerala for Rs 39 lakh and also put Rs 30 lakh in fixed deposits (FDs). However, the income tax department claimed that both the property purchase (Rs 39 lakh) and FD investment (Rs 30 lakh) were 'unexplained investments' under Section 69 of the Income Tax Act, a result, the entire Rs 69 lakh (39+30) was added to his income and accordingly he was issued tax notices and penalty proceedings were also initiated against him. To fight against this tax notice and penalty proceedings, this engineer at first filed an appeal in the Dispute Resolution Panel (DRP) of the tax department. He explained that since the time he was working in Dubai, he had been sending remittance money back to his family in India. He also explained that this Rs 30 lakh in FDs were simply old FDs that had matured and were also explained that the funds for the property investment came entirely from his salary in Dubai, meaning the income had never accrued or arisen in India. The DRP accepted the explanation for the FD money but rejected the property investment explanation so he filed an appeal in ITAT Mumbai ITAT Mumbai heard the arguments presented by both the tax department and the engineer's lawyers, and ruled in the engineer's favour because of two technical reasons. Among the two reasons, the first reason was the time when this engineer used his Dubai money to buy this Kerala property, he was a non-resident Indian (NRI). Secondly the benefit of Section 292BB under Income Tax Act, 1961 was not applied to this engineer's find out more about the technical reasons beind ITAT Mumbai's decision not to enforce Section 292BB to this case, which led to the engineer's win and the cancellation of the entire tax notice, keep reading. This article also outlines the four grounds of appeal that were accepted by ITAT Mumbai, contributing to the taxpayer's to the order of ITAT Mumbai dated June 27, 2025, here's the details:The engineer filed an appeal in DRP against this best judgement to the order of the ITAT Mumbai, here's what the engineer taxpayer's lawyers said:(no part of the explanation has been changed or altered, everything is as per what the judgement said)DRP accepted his arguments partially and said that he has successfully explained the source of funds for the Rs 30 lakh said this about the Kerala property investment: 'As regards, the investment in property, the applicant assessee has not been able to explain the sources of investment to the extent of Rs 36,12,173 with proper documentary evidence.'He filed an appeal in Mumbai ITAT against the order of the taxpayer's lawyer raised four grounds of appeal and ground 1 and 2 were accepted by ITAT Mumbai. Since ground 1 and 2 were accepted, ground 3 and 4 were deemed insignificant and four grounds of appeal as presented by the taxpayer's lawyers are as follows:ITAT Mumbai deleted the entire income addition under Section 69 unexplained investment provisions and decided not to apply Section 292BB benefits in this tax notice was issued by the tax AO of Mumbai zone while the engineer was an NRI and hence the international taxation department AO should have issued the notice. If Section 292BB benefits were applied in this case, then this technical issue of AO's jurisdiction would not have been an Mumbai said: ' In view of the decision on ground Nos.1 & 2 in favour of the Assessee wherein the notice issued under Section 148 were held to be issued without any jurisdiction, the decision on ground Nos.3 & 4 pails into insignificance and has been rendered academic and therefore needs no adjudication The appeal of the Assessee is disposed of in favour of the Assessee in above manner. Order pronounced in the open court on 27.06.2025.'ET Wealth Online asked various experts about the key legal takeaways from this judgement. Here's what they said:"The assessee secured relief purely on technical grounds, the ITAT rightly held that the notice under Section 148 was void ab initio, having been issued by an officer without jurisdiction over an NRI. This procedural defect alone rendered the assessment proceedings invalid. That said, even on merits, the taxpayer's position was defensible. The source of funds used to purchase the property i.e. matured fixed deposits—was well-documented; hence, the allegation of unexplained investment was inherently weak."'A jurisdictional defect, whether related to territorial boundaries or the subject matter of a case, undermines the very foundation of legal authority to proceed. Such a flaw is incurable and cannot be rectified. The established legal principles affirm that jurisdiction cannot be conferred by default. Consequently, any notice issued without proper jurisdiction is considered legally void, and this invalidity remains unaffected even by provisions such as Section 292BB. Nonetheless, it remains essential that jurisdictional objections are raised within the prescribed timeframe.''In the current case, the assessee has won on technical grounds i.e. the issuance of the reassessment notices are invalid as the same has been issued by wrong jurisdiction of the tax officer (i.e. notice was issued by domestic tax officer instead of international tax officer).''The tax assessing officer (AO), in his reassessment order, had alleged that the taxpayer has not been able to explain the sources of investment in immovable property with proper documentary evidence.'The ITAT order seems to suggest that the taxpayer had made efforts to submit some documentary evidence, which eventually was not accepted by the tax officer. Since the ITAT decided the matter in favour of the taxpayer on technical grounds, the ITAT has not commented on the merits of the case (i.e. the quality of the documentary evidence).''Where the matter would have been discussed on merits (i.e. in a situation where the notice would have been issued by an International Tax officer), the taxpayer would have had an opportunity to support his claim with respect to documentary evidence as well as he could have argued on the ground that the reassessment notice was issued beyond the prescribed time limits.''This case gives a lesson that whenever an NRI taxpayer receives a notice from the tax officer, apart from adhering to the notice and providing relevant information, the taxpayer should also make efforts to check the veracity of the notice to determine whether the said notice is correct in all respects, as the same could have an overall impact on the validity of the tax proceedings initiated by the tax officer.'The non-resident has succeeded in getting a big relief, but only after years of fighting. Timely replying to the Department's notices, submitting of evidence on sources for contentious investments, such as bank statements, a flawlessly computed income statement, tax paid challan, agreement for purchase of the property, assessing officer's lack of jurisdiction and a Bombay High Court's precedent and all saved the resident taxpayers, non-resident taxpayers are also subject to reassessments. Whenever the tax department feels that there was an income that escaped assessment, it can reopen closed tax returns for reassessments. For instance, a tax return of the assessment year 2024-25 can be reopened and issue reassessment notice up to March 31, 2028, if escaped income is less than Rs. 50 lakh, i.e. within three years and up to March 31, 2030, if escaped income is more than Rs. 50 lakh, i.e. five years from the end of the relevant assessment year (the Union Budget 2024-25 reduced it from ten years to five years).Thus, either non-resident or resident taxpayers should be more cautious, especially regarding tax implications while making the investment calls, accurately filing the return of income within the due date, and keeping all the relevant documentary evidence for a longer period and be prepared to respond timely as and when the Department seek clarifications or to contend the reopening exercise.
Al-Ahram Weekly
15-07-2025
- Business
- Al-Ahram Weekly
INTERVIEW - 'Egypt-Greece trade ties are excellent and growing stronger': Enterprise Greece CEO - Energy
Marinos Giannopoulos, CEO of Enterprise Greece, the country's official trade and investment promotion agency, spoke to Ahram Online about the growing momentum in Egypt-Greece economic relations, shared regional goals, and Greece's robust investment landscape. Ahram Online: What are the most significant joint initiatives between Egypt and Greece? How is economic cooperation evolving? Marinos Giannopoulos: Over the past few years, Egypt and Greece have ushered in a new era of commercial partnership. Energy cooperation has been a key pillar, ranging from fossil fuels and natural gas to renewables. Joint efforts include the GREGY Interconnector, the EuroAfrica Interconnector, the East Med Gas Forum, and the 2020 agreement on exclusive economic zones. These are now being complemented by newer efforts, most recently, an MoU on Carbon Capture Usage and Storage to support climate goals. Greek companies in sectors such as energy, construction, engineering, and healthcare are increasingly active in Egypt. Both countries are also building a new framework for agricultural labour cooperation. AO: What is the current status of the GREGY project, and how does it contribute to regional energy goals? MG: The GREGY Interconnector exemplifies the depth of Egypt-Greece relations. Designated as a European Union (EU) Project of Mutual Interest, it is expected to unlock 1 billion euros in grants and concessional funding. Initial tenders have already been awarded on the Greek side. The chosen companies will conduct feasibility studies, mapping the optimal cable route and calculating costs. Once completed, GREGY will transfer 3,000 MW of electricity, replace 4.5 bcm of natural gas annually, and slash CO₂ emissions by 10 million tons per year, significantly boosting sustainability and energy security across the region. AO: How would you describe Egypt-Greece trade relations, and which sectors are being prioritized? MG: Our trade ties are excellent and continue to strengthen, with bilateral trade now approaching 2 billion euros. Energy remains a cornerstone, but we are seeing significant potential in agriculture, building materials, and aluminium production. At Enterprise Greece, we are focused on linking Greek and Egyptian firms through business missions and matchmaking platforms. AO: What role does bilateral cooperation play in regional stability and economic development? MG: Egypt and Greece share a strategic vision for regional peace and prosperity. Public sector initiatives, such as GREGY or diplomatic summits, are catalysts for private-sector engagement, creating a virtuous cycle of trade and investment that supports regional resilience. That is why during the recent summit, we hosted a business forum to highlight opportunities and expand networks. AO: How would you assess the investment climate in Greece today? MG: Greece's investment environment is one of the strongest in Europe. According to EY's 2024 Attractiveness Survey, Greece ranked among Europe's top 20 destinations for the second year in a row. While overall foreign direct investment (FDI) declined in Europe, Greece secured 50 new greenfield investment projects. Enterprise Greece provides end-to-end investor support, manages incentive schemes including fast-track programmes, and promotes opportunities through global roadshows and investment events. Our goal is to build on Greece's economic recovery to ensure sustainable, long-term growth. AO: How is Greece leveraging the global green shift to attract sustainable investment? MG: Greece is a leader in the energy transition. Over 50 percent of electricity now comes from renewable sources, and we are exporting clean power to neighbours. We offer strong incentives for offshore wind farms, including energy upgrades, electric vehicle (EV) adoption, and national grid modernization. Under our National Energy and Climate Plan, we anticipate over 400 billion euros in energy sector investment by 2050, most of it in renewables and clean technology. International partners are responding. Volkswagen is pioneering a green mobility prototype on Astypalea Island, and the UAE's Masdar recently invested 3.6 billion euros to acquire clean energy firm Terna Energy. Cross-border interconnectors like GREGY further strengthen Greece's role as a regional clean energy hub. AO: How is Greece using its geographic position to foster regional and global investment? MG: Greece's strategic location, at the crossroads of Europe, Asia, and Africa, is a tremendous asset. Through infrastructure investment and privatization, we are turning Greece into a regional hub for technology, logistics, and trade. Piraeus Port is now among Europe's top five container ports, thanks to strategic foreign investment. We are also upgrading airports, road networks, and logistics infrastructure to support our role in corridors like the India-Middle East-Europe Economic Corridor (IMEC). We also serve as a tech hub, with advanced data centres and telecommunications, making Greece a launchpad into the EU for investors from North Africa and the Middle East. Enterprise Greece is a founding member of the ANIMA Investment Network, promoting economic ties across Europe, the Middle East, and Africa, and was recently re-elected to its board. AO: What is the long-term vision for Greece as an investment destination? MG: Our vision is to make Greece a pillar of stability and prosperity in the Eastern Mediterranean, a hub connecting continents and industries. Mega projects already underway include the 8-billion-euro Ellinikon urban redevelopment, Europe's largest. They also include the GREGY and potential Greece-Cyprus interconnectors, a 500-million-euro airport in Crete, and major road upgrades nationwide. However, our broader mission is to transform Greece's economy, move up the value chain, diversify sectors, and become a strategic partner for regional growth and innovation. Follow us on: Facebook Instagram Whatsapp Short link:
Scroll.in
15-07-2025
- Business
- Scroll.in
NICL AO admit card 2025 released; exams on July 20
The National Insurance Company Limited (NICL) has released the admit card for the Preliminary Examination of Administrative Officers (Generalists & Specialists) (Scale I). Applicants can download their hall tickets from the official website The exam will be conducted on July 20 for a duration of 60 minutes. The paper will consist of 100 questions of 100 marks. The questions paper will be bilingual i.e., Hindi and English except for the English subject. The recruitment drive aims to fill 266 vacancies. Steps to download AO admit card 2025
