Question ID :
38017
Capital Gain on Land
A plot was named of Two Directors and they have introduced the same in company's stock by crediting their Loan A/c. in 2014-15 However they had not made registry in favour of co. Thereafter co has constructed three floor from co. fund and sold them and returned the loan of director in different diffrent year . Director has not disclosed the same in their personal ITR . Now what to do and what is the implications thereof . Thanks in Advance
Posted by
SANDEEP KAPOOR
on
Mar 05, 2019
Filed Under
DIRECT TAXES
Directors must file rectification of Mistake u/s 154(8) of the relevant Assessment Year in which Plot Sold to company and if entire property is sold then, the registry in favour of company may not be required now. If Directors do not file rectification, the AO may apply 147 - Income escaping assessment.
Posted by
Ashish Kumar Goyal on
Mar 07, 2019
Answer ID :
76342
Since the land is not registered in the name of the company, therefore all practical purpose the directors are the owner of the land. Hence capital gain arisen on the sale of land belongs to the Directors of the Company.
If the directors have not considered the same in their personal income tax return then they should file rectification of mistakes for it under section 154 of the Income tax act,1961. Otherwise if it comes to the notice of the department then they can assess the same as income escaped assessment.
Posted by
CA. JHA SHANKAR KUMAR on
Mar 07, 2019