The Duru Mahal Cooperative Housing Society Limited, located at Marine Drive, had claimed a deduction of Rs 8,23,830 under Section 80P of the Income Tax Act for Assessment Year 2018-19. Section 80P provides co-operative societies with deductions on certain income, including interest earned from co-operative banks.

The society filed its income tax return on 29 September 2018. The Centralised Processing Centre (CPC) of the Income Tax Department, while processing the return under Section 143(1), denied the deduction entirely. The stated reason: the return was filed after the due date under Section 139(1) of the Act, triggering the bar under Section 80AC, which disallows deductions under certain provisions if the return is filed late.

The problem with this conclusion, as the society argued before the ITAT, was that the CPC had applied the wrong deadline.

Under the Income Tax Act, the due date for filing returns under Section 139(1) varies by the type of assessee. For entities whose accounts are required to be audited — which co-operative housing societies are — the applicable deadline for AY 2018-19 was 30 September 2018, not 31 August 2018. The CPC had applied the August deadline, which applies to assessees not required to get their accounts audited.

The society had filed on 29 September — one day before the correct deadline. Yet the CPC treated this as a late filing and denied the Rs 8.23 lakh deduction. The Commissioner of Income Tax (Appeals) upheld the CPC’s action, and the society approached the ITAT.

The Tribunal found no ambiguity in the facts. The assessee was a co-operative housing society with mandatory audit requirements. The correct deadline was 30 September. The return was filed on 29 September. It was, by any measure, an on-time filing.

The ITAT further noted that the deduction itself had not been challenged on merits — at no point did the department argue that the interest income was ineligible for deduction under Section 80P. The sole basis for denial was the alleged late filing, and once that premise collapsed, so did the entire disallowance.

The Tribunal set aside the CIT(A)’s order and directed the Assessing Officer and CPC to allow the Section 80P deduction and recompute the society’s income accordingly.

Parties: Duru Mahal Cooperative Housing Society Limited (Appellant) vs. Circle 19(3), Mumbai, Income Tax Department (Respondent)

Tribunal: Income Tax Appellate Tribunal, “H (SMC)” Bench, Mumbai

Coram: Smt. Beena Pillai (Judicial Member) and Shri Jagadish (Accountant Member)

Date of Hearing: 10 June 2026

Date of Pronouncement: 16 June 2026

ITA Number: ITA No. 1320/Mum/2026

Assessment Year: 2018-19

Key Aspects of the Order:

• The CPC and CIT(A) both incorrectly held that the due date for filing the return was 31 August 2018
• The correct due date for a co-operative housing society subject to audit under Section 139(1) for AY 2018-19 was 30 September 2018
• The society filed its return on 29 September 2018 — one day before the actual deadline
• Section 80AC bars deductions if a return is filed after the due date under Section 139(1); since the return was timely, this bar did not apply
• The department never challenged the eligibility of the deduction on substantive grounds — only the alleged delay
• The ITAT directed the CPC/AO to allow the Rs 8,23,830 deduction and recompute income

How the Society Was Saved by One Day: The society filed its return on 29 September 2018. Had it filed on 30 September or later, even the correct deadline would have been missed. The authorities had assumed a wrong deadline of 31 August, which would have made the September filing appear late by nearly a month. It was only on appeal before the ITAT that the correct legal position — an audit-mandatory entity gets until 30 September — was properly applied, vindicating the society’s timely compliance and restoring its full deduction.

Also Read: Cancellation Loss Allowed – But Only in the Right Year: Key ITAT Ruling for Mumbai Builders

The post Mumbai Co-op Housing Society Wins Rs 8.23 Lakh Tax Battle After Filing Return a Day Early appeared first on Square Feat India.

The Purchase

The registered sale agreement, dated 4 April 2012, recorded the total consideration for the flat at ₹72 lakh. Katkade filed his income tax return for Assessment Year 2012-13 declaring an income of ₹2,71,280. The IT Department processed the return and accepted it without objection. For Katkade, the matter was closed.

The Raid He Knew Nothing About

On 24 September 2014 — more than two years after Katkade had taken possession of his flat — the IT Department’s investigation wing conducted a search and seizure operation at the offices of Cosmos Group, the builder. Cosmos Group was engaged in real estate development and construction across the Mumbai Metropolitan Region.

During the raid, investigators claimed to have found Excel sheets containing flatwise and shopwise cash payment records, emails in the builder’s Gmail and Yahoo accounts, and what they described as a cash book of on-money received from buyers. Two key persons were questioned — Karuna Khambayat, the Sales Head of Cosmos Group, who made a general admission that cash payments were often involved in the sale of flats and shops, and Suraj Parmar, son of promoter Ramesh Parmar, who spoke about cash transactions in the business.

Flat No. 802 — Katkade’s flat — appeared in those Excel sheets with cash figures against it.

Katkade was not present during the raid. He was not questioned. No one from the IT Department contacted him. He had no knowledge that a file bearing his flat number now existed inside the investigation wing.

Five Years of Silence, Then a Bombshell

For nearly five years after the raid, nothing happened. Then, on 29 March 2019 — seven years after the original flat purchase and five years after the Cosmos Group raid — Katkade received a notice under Section 148 of the Income Tax Act. The IT Department was reopening his already-closed assessment for AY 2012-13.

The basis was information passed by the Directorate of Income Tax (Investigation), Unit 1(4), Mumbai. The Assessing Officer (AO) had obtained prior approval from the Principal Commissioner of Income Tax (Pr. CIT-2), Thane. The allegation was stark — that Katkade had paid ₹34.5 lakh in cash over and above the registered agreement value, split as ₹28.5 lakh in AY 2012-13 and ₹6 lakh in AY 2013-14. Since Katkade held a 50% share in the flat, the AO proposed to add ₹14.25 lakh — 50% of ₹28.5 lakh — to his income for AY 2012-13 as unexplained money under Section 69A of the Income Tax Act.

The Letter the IT Department Refused to Believe

Katkade fought back. He filed a fresh return in response to the notice, denied paying any on-money, and asked the AO to refer the matter to the District Valuation Officer for an independent valuation. The AO rejected that request, saying the case did not pertain to flat valuation.

When the AO issued a show cause notice asking Katkade to explain why ₹14.25 lakh should not be added to his income, Katkade did something significant. He went back to Cosmos Group and obtained a written confirmation letter from the builder stating that the total amount received from Katkade and his wife for Flat No. 802 was ₹72 lakh — nothing more, nothing less. The very builder whose internal records the IT Department was relying upon to allege cash payment was now confirming in writing that no such additional payment existed.

The AO dismissed the letter entirely and made the addition anyway, relying instead on the Excel sheet from the raid and the statements of Suraj Parmar and Karuna Khambayat.

There was one more problem — the actual incriminating documents, the Excel sheets, the emails, the cash book, were never shown to Katkade at any stage of the assessment. He was being taxed on the basis of evidence he had never seen.

Appeal Rejected, Fight Continues

Katkade appealed to the Commissioner of Income Tax (Appeals) — CIT(A) — at Panaji. He raised three arguments: that the reopening of the assessment after seven years was itself legally invalid; that the addition was baseless since no evidence had ever been produced before him; and that he had been denied the right to cross-examine Karuna Khambayat and Suraj Parmar, whose statements were being used against him.

The CIT(A) rejected all three. On the cross-examination request — a right firmly established by the Supreme Court in Andaman Timber Industries vs CCE — the CIT(A) gave a puzzling response, holding that the addition was not based only on the incriminating material and therefore cross-examination was not required. The order was passed on 26 September 2025.

ITAT: The Addition Was Never Sustainable

Katkade’s chartered accountant, Subodh Ratnaparkhi, filed an appeal before the ITAT Mumbai in November 2025. The case came up for hearing on 18 March 2026 before a two-member bench of Judicial Member Pawan Singh and Accountant Member Makarand Vasant Mahadeokar.

Before the Tribunal, Ratnaparkhi placed on record five previous ITAT orders where identical additions had been made against other Cosmos Group flat buyers — and deleted in every single case. The buyers included Bharat Laxman Bhiwapurkar, Mamta Sharad Gupta, and Monika Anand Gupta. In each case, the basis was the same Excel sheet, the same statement of Suraj Parmar, and the same methodology. In each case, the Tribunal had ruled against the IT Department.

The Revenue’s Senior Departmental Representative, Usha Gaikwad, supported the lower authorities and argued that the statements and seized material were sufficient basis for the addition.

The Tribunal was unconvinced. In its order pronounced on 4 June 2026, the bench held that the addition was based solely on third-party statements, which cannot be used as evidence against a buyer without cross-examination. It further held that the Excel sheet was inadmissible as electronic evidence since it had not been authenticated under Section 65B of the Indian Evidence Act. The actual seized documents — the emails and cash books — had never been brought on record before any authority at any stage. The builder’s own confirmation letter confirming ₹72 lakh had been ignored without any valid reason. Following five coordinate bench decisions on identical facts, the Tribunal deleted the addition entirely.

Since Katkade had won on merit, the bench did not even find it necessary to rule on whether the 2019 reopening was legally valid in the first place.

What This Means for Homebuyers

The Katkade case is not an isolated incident. It is part of a pattern. The ITAT has now deleted on-money additions linked to Cosmos Group in at least six cases, consistently finding that the Excel sheets seized during the 2014 raid are inadmissible, that general admissions by builder insiders cannot be attributed to specific buyers without corroboration, and that denying buyers the right to cross-examine witnesses whose statements are used against them is a violation of natural justice.

For homebuyers across India, the case carries a broader warning. A builder raid can trigger tax demands against buyers years or even decades after a purchase. The IT Department can reopen assessments using information from someone else’s search. And the buyer — who had no part in that raid, never saw those documents, and may have paid every rupee above board — can find themselves fighting a tax addition based entirely on a figure in someone else’s spreadsheet.

The only protection is documentation. A registered agreement, a complete payment trail through banking channels, and written confirmations from the builder at the time of purchase are a homebuyer’s best defence if the taxman comes knocking years later.

For Katkade, that defence ultimately worked — but it took fourteen years, two appeals, and a Tribunal order to prove it.

The order is dated June 4, 2026.

Also Read: ITAT Mumbai Clears Real Estate Developer of Fraud Allegations, Allows ₹1.79 Crore Tax Deduction

The post Builder Confirmed No Cash, IT Department Didn’t Believe Homebuyer appeared first on Square Feat India.

In its order dated 20 May 2026, the ITAT ‘E’ Bench partially allowed the appeal of Kailash Gul Rajani for Assessment Year 2020-21. The assessee had sold two Mumbai flats and invested the gains in a new residential flat at Dosti Flamingo, Sewri.

For the Shanti Niketan flat (Marine Drive), the assessee claimed ₹1.34 crore exemption under Section 54F. He argued that the flat had been used for decades as a dental clinic and submitted strong evidence — society secretary’s confirmation, commercial municipal tax bills, electricity charges at commercial rates, and photographs.

However, both the Assessing Officer and CIT(A) rejected the claim, ruling that the flat remained a residential house in law. Factors such as the purchase deed, stamp duty paid at residential rates, and society records determined its legal character. Mere commercial use without formal change-of-user permission does not convert it into a commercial asset.

ITAT’s Verdict:

The Tribunal upheld the denial of Section 54F exemption. Relying on precedents like Srimati Radha Devi vs. ITO and ITO vs. Smt. Sushila M. Jhaveri, it held that the legal status of the property prevails over its actual use.

On the alternate claim under Section 54, the ITAT took a taxpayer-friendly stance. Since the assessee had already claimed Section 54 on the first flat (Mahindra Aspen), the CIT(A) had rejected the second claim. However, citing the Supreme Court ruling in Goetze (India) Ltd. vs. CIT, the Tribunal set aside the matter and directed the Assessing Officer to:

• Freshly examine the assessee’s eligibility for Section 54 exemption on the Shanti Niketan flat.
• Verify the qualifying investment in the new residential house.
• Give the assessee proper opportunity of being heard.
• Recompute the taxable capital gain.

The appeal was allowed for statistical purposes.

Key Takeaway: Even if a residential flat is used as a clinic or office for many years, it does not automatically qualify for Section 54F (commercial asset) exemption. However, the assessee may still claim relief under Section 54 if other conditions are met.

Also Read: 16.14 Lac Mumbaikars get 100% relief from Property Tax payment

The post Can A Residential Flat Used As Clinic Claim Capital Gains Exemption, Meant for Commercial Property? appeared first on Square Feat India.

The order, pronounced on 23 April 2026 by ITAT Mumbai Bench “E”, strengthens the long-standing demand of taxpayers that the holding period for capital gains purposes begins when substantive rights in the property are acquired, rather than on the date of legal registration.

The Core Dispute

The central question before the Tribunal was: Should the date of allotment or the date of registration of the agreement be considered for determining whether the capital gain is long-term or short-term?

In the case of Kuntal Rasiklal Narechania vs. Income Tax Officer (ITA No. 6306/MUM/2025), the assessee had received an allotment letter for a flat in Kandivali Ashish Co-operative Housing Society on 30/31 January 2008. He and his wife made payments in instalments from 2007-08 onwards. The formal purchase agreement was registered only on 8 July 2016, and the flat was sold shortly thereafter on 9 August 2016.

The taxpayer computed his gain as Long Term Capital Gain (LTCG), claiming the holding period began in 2008. The Income Tax Department, however, took the registration date of 2016 as the date of acquisition, treated the gain as Short Term Capital Gain (STCG), and made an addition of over ₹82 lakh based on stamp duty valuation.

ITAT’s Ruling

The Tribunal, comprising Accountant Member Shri Om Prakash Kant and Judicial Member Shri Sandeep Singh Karhail, set aside the orders of the Assessing Officer and CIT(Appeals) and restored the matter for fresh adjudication.

In a detailed order, the Bench observed that the allotment letter issued in 2008 conferred enforceable rights in the property. It noted that payments were made jointly by the assessee and his wife over several years, and the allotment letter itself formed part of the later registered agreement.

Relying on the Bombay High Court judgment in PCIT vs. Vembu Vaidyanathan, the ITAT held that the allottee gets title to the property on the issue of the allotment letter, and subsequent payments and registration are only follow-up actions.

The Tribunal further noted that both husband and wife were named in the 2008 allotment letter, and the wife had also declared 50% of the capital gain in her return, claiming Section 54 exemption.

Key Observations of the Tribunal

“The material placed before us, including the allotment letter, payment receipts, and bank statements, prima facie indicate that rights in the property had accrued in favour of the assessee much prior to the execution of the registered agreement.”

The ITAT directed the Assessing Officer to re-examine the case, keeping in mind that the date on which substantive rights were transferred should be treated as the date of acquisition for capital gains computation. If the holding period qualifies as long-term, the assessee’s claim for deduction under Section 54 must also be considered.

Significance of the Order

This ruling assumes great importance because many buyers in cooperative societies and under-construction projects receive allotment letters years before the builder or society executes the formal registered agreement. Treating the registration date as the acquisition date often converts long-term gains into short-term gains, resulting in substantially higher tax liability.

The decision aligns with CBDT Circular No. 471 dated 15.10.1986 and multiple earlier ITAT rulings. It is expected to provide relief to taxpayers facing similar disputes across the country.

The matter has now been sent back to the Assessing Officer for fresh examination with directions to afford the assessee adequate opportunity of being heard.

Also Read: MHADA Waives Interest for 2005 Lottery Winner; Orders Action in Wrong Allotment Case

The post Allotment Letter Date or Registration Date: ITAT Mumbai Clarifies Key Rule for Capital Gains Tax on Flats appeared first on Square Feat India.

The case, decided by a bench of Smt. Beena Pillai (Judicial Member) and Shri Girish Agrawal (Accountant Member) on April 15, 2026, is a textbook illustration of how large cash transactions — even entirely legitimate ones — can spiral into prolonged tax litigation when documentation is incomplete and third parties don’t cooperate with the taxman.

The Transaction That Caught the Taxman’s Eye

Pooja had not filed an income tax return for the financial year 2009-10 (Assessment Year 2010-11), believing her income was below the taxable threshold. She had no salary, no business income to speak of, and reported interest income of a mere Rs 14,429 when eventually asked to file.

But the Income Tax Department’s data systems told a different story. A review of her individual transaction statement flagged two significant financial events during that year — a cash deposit of Rs 40.09 lakhs into a Bank of Maharashtra account, and the purchase of a flat at Dev Shrishti, Kurla Camp Road, Ulhasnagar for Rs 12.65 lakhs, paid by cheque. Together, these transactions amounted to over Rs 52 lakhs — a striking sum for someone claiming negligible income.

The Assessing Officer (AO) at Income Tax Ward 2(3), Kalyan issued a notice under Section 148 of the Income Tax Act in March 2017, invoking Section 147 to reopen the case on the ground that income had escaped assessment. Pooja was required to file a return and explain these transactions.

The Explanation: A Property Deal That Never Closed

Pooja’s explanation was straightforward. She had entered into a sale agreement with a developer, M/s Samruddhi Developers, for the sale of her ancestral house property — a plot identified as BK 1894-U No. 204, Shade No. 68. The developer had paid her a token advance of Rs 40 lakhs in cash, in two tranches: Rs 20 lakhs in June 2009 and another Rs 20 lakhs in December 2009. She deposited this cash into her Bank of Maharashtra account.

However, the sale ultimately did not go through. The deal fell apart and was cancelled. Since the advance had been received in cash, she returned it to the developer in cash — withdrawing the money from her bank account, as reflected in her passbook. She produced copies of the sale agreement and her bank passbook to support her account.

As for the flat purchase in Ulhasnagar, she explained that it was funded through three cheques totalling Rs 12.65 lakhs — a separate transaction entirely, with its own paper trail.

Why the Tax Officer Wasn’t Convinced

The Assessing Officer found the explanation plausible on its face but unverifiable. The critical problem was the developer. The AO issued a notice under Section 133(6) of the Income Tax Act to M/s Samruddhi Developers, asking them to confirm the transaction — but the developer simply did not respond.

With no third-party confirmation of the cash advance, the AO took the view that Pooja had failed to explain the source of the cash deposits with adequate documentary evidence. He invoked Section 68 of the Income Tax Act — which deals with unexplained cash credits — and added the entire Rs 40.09 lakhs to her income for the year. Interestingly, he did not pursue the flat purchase separately, treating that as explained by the cheque trail.

The addition of Rs 40.09 lakhs as unexplained income meant a substantial tax demand on a woman who had reported virtually no income that year.

The First Appeal: Half Relief, Half Frustration

Pooja challenged the addition before the Commissioner of Income Tax (Appeals), or CIT(A), operating through the National Faceless Appeal Centre (NFAC) in Delhi. She reiterated her explanation about the developer and the cancelled deal.

The CIT(A) was sympathetic but non-committal. In what can only be described as a compromise ruling, he observed that “there may be certain element of truth in the conditions of the assessee and the same cannot be totally ignored.” Rather than either accepting or rejecting her explanation fully, he split the addition down the middle — accepting 50% of the deposits as explained and confirming the remaining 50% as unexplained cash credit. This left Pooja with an addition of approximately Rs 20.04 lakhs still standing against her.

Neither side was fully satisfied. However, the Income Tax Department chose not to appeal the 50% relief granted by CIT(A) to the ITAT — which meant that portion was settled in Pooja’s favour. Pooja, on the other hand, appealed the remaining Rs 20.04 lakh addition to the ITAT.

A Complication: The 108-Day Delay

Before the ITAT could even hear the case on merits, there was a procedural hurdle. Pooja had filed appeals for two assessment years — 2010-11 and 2014-15 — and the CIT(A) had passed orders on both within a day of each other in December 2024. Pooja mistakenly believed both orders were the same, forwarded only one to her tax consultant, and the appeal for AY 2010-11 was consequently not filed within the prescribed time limit. The delay was 108 days.

She filed a petition for condonation of delay along with an affidavit explaining the genuine mix-up. The ITAT accepted this explanation, found the delay to be bona fide and unintentional, condoned it, and admitted the appeal for hearing.

What the ITAT Found: Two Critical Errors

When the ITAT examined the record in detail, it found that the remaining Rs 20.04 lakh addition suffered from two distinct and fatal flaws.

Error One — A Daughter’s Account Wrongly Attributed to the Mother

The total cash deposits of Rs 40.09 lakhs that the AO had added to Pooja’s income were not all in Pooja’s account. The ITAT found that the deposits were spread across two Bank of Maharashtra accounts — Rs 32.01 lakhs in Account No. 20116731464 held in Pooja’s own name, and Rs 8.99 lakhs in Account No. 20116743538 held in the name of Miss Pragathi Wadhwani — Pooja’s daughter.

This was a straightforward error. Deposits in a daughter’s bank account cannot be added as unexplained income in the mother’s hands. The ITAT deleted the Rs 8.99 lakh addition on this ground alone. When the department’s representative was confronted with this fact, he had nothing to say in response.

Error Two — Withdrawals Explained the Re-Deposits

After removing the daughter’s deposits and accounting for the 50% relief already given by CIT(A), the disputed amount that remained was Rs 12.01 lakhs. This was the sum the ITAT now had to decide on.

Pooja’s counsel pointed the tribunal to her bank passbook, which showed a clear pattern. Between July 2009 and March 2010, Pooja had made withdrawals from her account totalling Rs 15.20 lakhs. The cash deposits of Rs 12.60 lakhs that the taxman found suspicious were made on March 30 and 31, 2010 — after those withdrawals. In other words, the deposits were simply money she had previously withdrawn, sitting with her in cash, and then re-deposited.

The ITAT laid down a clear and important principle: once there are deposits in a bank account with corresponding prior withdrawals, the entire deposit cannot automatically be treated as unexplained income. The burden shifts to the Revenue — it must specifically demonstrate that the withdrawals were used for some other purpose and were therefore not available to the assessee for re-deposit. The department failed to discharge this burden. The Rs 12.01 lakh addition was accordingly deleted.

The Final Scoreboard

The appeal was allowed in full. Pooja walked away with a clean slate for Assessment Year 2010-11, more than 15 years after the original transactions took place.

The Broader Lesson

This case carries important lessons for anyone dealing in cash — particularly in property transactions. A legitimate deal, a cancelled agreement, and a developer who simply didn’t respond to a tax notice were enough to trigger over a decade of litigation for an ordinary woman from Ambernath.

The ITAT’s ruling reinforces two key principles of tax law. First, family members’ bank accounts must not be clubbed together without clear legal basis. Second, cash re-deposits backed by prior withdrawals from the same account cannot be treated as fresh unexplained income unless the department can prove the withdrawals were deployed elsewhere.

For taxpayers, the case underscores the importance of ensuring that all parties to a property transaction — especially developers receiving or returning cash — respond to tax notices when called upon, since a developer’s silence can turn a straightforward explanation into years of appellate proceedings.

Also Read: ITAT Mumbai Clears Real Estate Developer of Fraud Allegations, Allows ₹1.79 Crore Tax Deduction

The post Property Deal Gone Wrong: Rs 40 Lakh Cash Deposit Lands Ambernath Woman in Tax Trouble appeared first on Square Feat India.

This Mumbai-based case involves Shri Nishant Laxmikant Mehar and his wife, Mrs. Parnal Nishant Mehar. It serves as a cautionary tale for countless Indian families who add a spouse’s name to property documents for emotional or security reasons, without realizing the potential long-term tax consequences.

Chronological Timeline of Events

• 2015–16 (Financial Year / Assessment Year 2016–17): The couple sold an immovable property (likely a residential flat) for a total consideration of ₹1,39,75,000 (approximately ₹1.40 crore). The registered sale deed listed both Shri Nishant Laxmikant Mehar and Mrs. Parnal Nishant Mehar as joint owners. As per arguments presented later, Mrs. Parnal Nishant Mehar’s name was included solely “out of love and affection”—a common, sentimental practice in India where a spouse’s name is added to the title for bonding, future security, or tradition, even if she made no financial contribution and held no actual beneficial interest in the property.
• September 21, 2016: Shri Nishant Laxmikant Mehar filed his income tax return for AY 2016–17, fully declaring the ₹1,39,75,000 sale consideration. He computed and paid tax on the entire long-term capital gain, treating himself as the real/beneficial owner.
• Mrs. Parnal Nishant Mehar did not file her own return for the year, presumably because she viewed her inclusion in the deed as nominal and non-taxable.
• March 14, 2023: Nearly seven years later, the Income Tax department flagged the transaction through data sources (such as property registration records or Annual Information Returns). They also noted unreported salary income from Jet Airways (India) Ltd. Believing income had “escaped assessment,” the department reopened Mrs. Parnal Nishant Mehar’s case under Section 147 and issued a notice under Section 148.
• 2023–2024: Despite several follow-up notices and a show-cause letter, there was no response or appearance from Mrs. Parnal Nishant Mehar. The Assessing Officer (AO) proceeded ex-parte and passed the assessment order on January 31, 2024 (under Sections 147, 144, and 144B):
  • Noting the joint names on the sale deed without specified shares, the AO applied the standard presumption of equal (50:50) ownership in husband-wife cases.
  • Attributed 50% (₹69,87,500) of the sale value to Mrs. Parnal Nishant Mehar.
  • With no evidence submitted on her cost of acquisition (purchase price or indexed cost), it was taken as zero.
  • The full ₹69,87,500 was taxed as long-term capital gain in her hands.
  • An additional ₹17,00,240 salary from Jet Airways was included.
  • Total assessed income: ₹86,87,740 — resulting in a substantial tax demand, with roughly ₹70 lakh linked to the capital gains portion.
• 2025: Mrs. Parnal Nishant Mehar appealed to the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi. The appeal was dismissed on September 2, 2025, purely on technical grounds: failure to pay the prescribed advance tax/fee under Section 249(4).
• 2025–2026: The case reached the ITAT Mumbai “C” Bench (comprising Shri Vikram Singh Yadav, Accountant Member, and Shri Sandeep Singh Karhail, Judicial Member). After hearings, the final order was pronounced on March 9, 2026 (ITA No. 8389/Mum/2025; a duplicate physical filing was dismissed as unnecessary).

Key Arguments and ITAT Ruling

Counsel for Mrs. Parnal Nishant Mehar submitted:

• The entire sale proceeds were already declared and taxed in Shri Nishant Laxmikant Mehar’s 2016 return.
• Her name was added only “out of love and affection,” with no real ownership or contribution.
• Taxing the same transaction again would constitute impermissible double taxation.

The Tribunal found strong merit in these points:

• The husband’s return was filed in 2016—well before reassessment proceedings against the wife in 2023.
• The same capital gain cannot be taxed twice if fully offered by the beneficial owner.
• On the salary addition, it appeared duplicated and already subjected to tax deduction at source (TDS), as evidenced by Form-16 (₹8,59,720 salary; ₹20,030 TDS).

Final Outcome: The appeal was allowed. The ITAT set aside the assessment and remanded the matter back to the Assessing Officer strictly for verification:

• Confirm the husband’s ITR declaration and tax payment on the full ₹1,39,75,000.
• Verify the Jet Airways Form-16 for salary and TDS.
• If facts are corroborated, grant complete relief by deleting both additions—likely reducing the tax demand to zero or near-zero.

Broader Implications: The “Love and Affection” Pitfall

Adding a family member’s name to property deeds “out of love and affection” is a routine practice in India, often done without legal advice. However, income tax law prioritizes legal title over intent:

• Unspecified shares in joint deeds frequently lead to a 50:50 presumption.
• Delayed data matching can trigger reassessment notices years later (up to 10 years in some cases).
• Non-compliance with notices results in harsh ex-parte orders.

Recent ITAT rulings (including Mumbai bench decisions) have clarified that mere legal title does not always trigger capital gains tax if evidence proves one party as the beneficial owner and the addition was nominal. Yet, as this case shows, ignoring notices can inflate liabilities dramatically.

Experts advise: Document such arrangements clearly—via affidavits, relinquishment deeds, or explicit share mentions—to safeguard against future disputes.

This real Mumbai case highlights how a gesture of love can unwittingly invite tax scrutiny, emphasizing the need for proactive tax compliance and proper paperwork in family property matters.

Also Read: Income Tax Tribunal Rules: Redevelopment Gains Not Taxable for Housing Societies; Crucial Shield for Flat Owners

The post Added Wife’s Name in Property Out of Love? Got ₹70 Lakh Tax Notice appeared first on Square Feat India.

The Controversy That Started in 2016

In February 2016, Preity Zinta sold her luxury apartment at Quantum Park, Union Park, Bandra (West), which was registered in three parts (in her name, her mother’s name, and her company’s name) for a total consideration of ₹7.13 crore. Around the same time, ₹13.10 crore was credited and debited from a newly opened Corporation Bank account within days, triggering alarm bells in the Income Tax department’s investigation wing.

The Assessing Officer alleged that the transactions were “sham and circular” – money routed through entities linked to businessman Danish Merchant to introduce unaccounted income – and added ₹10.84 crore as unexplained cash credits under Section 68.

What Really Happened: Loan Restructuring, Not Money Laundering

The Income Tax Appellate Tribunal (ITAT) “I” Bench, Mumbai, in its detailed 17 November 2025 order, accepted Preity Zinta’s explanation:

• She had borrowed large sums from Danish Merchant and his group companies (Ace Light Hospitality, Ace Links, Ace Housing) during 2012–2015 due to financial distress.
• The Quantum Park flat was mortgaged as security for these loans.
• In 2016, to avoid violation of Sections 184 & 185 of the Companies Act (which restrict companies from giving loans to individuals), Merchant insisted the loan be shifted from his private limited company to his partnership firm (Ace Links).
• The flat sale proceeds and fresh loans from Ace Links were used to square off the old loan – a pure restructuring, not infusion of black money.

The Tribunal noted that identity, creditworthiness, and genuineness of all transactions were fully proved with bank statements, registered sale deeds, confirmations, and audited accounts.

ITAT’s Final Verdict: Complete Clean Chit

The bench comprising Vice President Saktijit Dey and Accountant Member Girish Agrawal held:

“The transactions are genuine… Assessee has not derived any benefit… It merely resulted in transferring liability from one entity to another. No addition is called for.”

The entire ₹10.84 crore addition was deleted. All legal grounds (reopening validity, limitation, jurisdiction) became academic.

Preity Zinta’s Long Legal Battle Ends

This was the second round of litigation at ITAT. The actress had already declared capital gains on the flat sale and paid tax on it in her original 2016 return. The department’s reopening in 2021 and subsequent additions through the DRP route have now been quashed.

Also Read: Amitabh’s Pratiksha Bungalow Has A New Owner

The post Preity Zinta Wins Big: ₹10.84 Crore Tax Addition Deleted in Quantum Park Flat Sale Controversy appeared first on Square Feat India.

By Varun Singh

MahaRERA Chairman, Ajoy Mehta bought the Samata Apartment flat in October 2020, within a month his son Shivaji bought another apartment in Prabhadevi.

The flat that Ajoy Mehta’s son bought measures 750.92 sqft carpet area and 1300 sqft built-up area, and the total amount paid for this flat is Rs 2.86 crore.

The flat is located on the 10th floor of the building named Sidhivinayak Horizon, Prabhadevi. The documentation for the deal was carried out on November 2, 2020, while the registration was done on November 6, 2020.

The flat was sold by Sachin Khanolkar and his wife (the current sellers). Mehta’s son while registering the apartment, gave the address of the Samata Apartments.

A detailed SMS sent to Ajoy Mehta seeking his and his son’s comment got us no response. Mehta in the past has occupied the chair of BMC commissioner, state’s Chief Secretary, and even that of the Principal Advisor to the Chief Minister, Uddhav Thackeray.

About the flat.
The flat was bought by the current seller Sachin and his wife via an agreement for sale dated February 2, 2012, admeasuring 1300 sqft of the built-up area including balcony.

Under an agreement for sale dated March 26, 2016, between the current sellers and one D K Saigal, the current sellers had agreed to sell the flat to Saigal.

Saigal then leased out the apartment via a leave and license agreement dated March 20, 2018. This agreement commenced on April 1, 2018, and was to expire on March 31, 2021.

The sale between the current sellers and Saigal was to be completed within a period of 373 days from the date of agreement that is March 26, 2016. However, the deal couldn’t be completed hence after due discussion the parties mutually agreed not to proceed with the sale transaction and canceled the agreement dated March 26, 2016.

A cancellation deed dated October 27, 2020, was registered between both parties. Even the leave and license agreement was canceled.

After this Ajoy Mehta’s son bought the apartment from the current sellers and registered the deal on November 6, 2020.

Payment
Prior to the execution of the agreement, the buyer paid to the sellers the entire agreed consideration by a cheque dated November 5, 2020, for Rs 24 lakh and by an RTGS of Rs 2,59,85,500 (Rs 2.59 crore). TDS of Rs.2,14,500 (Rs 2.14 lakh) was to be deposited with the income tax department.

The flat was put on rent the same day of registration
On November 6, 2020, Ajoy Mehta’s son gave the apartment on rent for a period of two years to the tenant with whom Saigal had carried out leave and license agreement earlier. The rent per month for the first year is Rs 1.38 lakh, for the second year, it is Rs 1.46 lakh per month.

Stamp duty paid by Transferor
All expenses towards stamp duty and registration charges were borne and paid by the transferor in this case the sellers alone. The transfer premium charged and chargeable by Siddhivinayak Horizon and any other charges were also to be paid by the transferor alone without recourse to the transferee.

A stamp duty of Rs 5.72 lakh was paid for the registration of the flat. Along with the flat, the buyer got access to two car parks in this building.

Plot owned by Municipal Corporation
Prior to the year 1995, the plot of land owned by the Municipal Corporation of Greater Mumbai was occupied by various slum dwellers. With the intention of redeveloping the Slum under the provisions of DCR 33(10), the slum dwellers incorporated a housing Society in the name of Akanksha SRA cooperative housing society limited. The society appointed Siddhivinayak Construction Private Limited as the developer for effecting redevelopment of the slum.

The developer was issued a letter of intent dated July 26, 1996, by the Slum Rehabilitation Authority for the redevelopment. After obtaining the necessary building permission the developer effected the redevelopment and constructed on the municipal slum land various units forming part of the rehabilitation component as well as the free sale component.

The building constructed by the developer on the land comprising of free sale units is known as Siddhivinayak Horizon the Slum Rehabilitation Authority issued an occupation certificate dated August 21, 2007, for the sale building.

Nariman Point Deal
In October 2020, Ajoy Mehta bought the flat located on the 5th floor of Samata Co-operative Housing Society, on General Jagannath Bhosale Marg near Mantralaya, Nariman Point. The carpet area of the flat is 1,076 square feet and he had paid Rs 5.3 crore for the apartment.

Also Read: Avinash Bhosale Buys Rs 103 Crore Duplex In Mumbai

The post Ajoy Mehta’s Son bought Prabhadevi Flat for Rs 2.86 Cr within a month of Nariman Point deal appeared first on Square Feat India.

By  Ravi Singhal

If you are buying home first time, you are entitled to get Income Tax benefits on home loan under three sections- Section 80C, Section 24 and Section 80EEA of Income Tax Act.

These sections of Income Tax Act let you avail home loan benefit of Rs 5 lakh annually.  Let’s understand with this detailed chart of Income Tax sections: –

Now, let’s consider a scenario that you have purchased a property in April 2021, property value is Rs 50 Lakhs and you have taken 80% loan i.e. Rs 40 lakhs on it from a financial institution (Bank or NBFC) at interest rate of 7% for 20 years. Now your monthly EMI would be around Rs 31,000 and you have to pay a total amount of Rs 3,72,000 in first year, out of which Rs 2.77 lakhs is interest component payment and Rs 95,000 is principal component amount. Suppose your annual earning is Rs15 Lakhs annually, in that case you can claim Rs 95,000 (principal payment) deduction under 80C (remaining Rs 55000 of 80C can be claimed from stamp duty payment, valid for only first year), Rs 2,00,000 under section 24 and remaining Rs 77,000 interest amount under Section 80EEA.

So, first year you can take tax deduction benefits of Rs 4.27 lakhs. Moreover, principal and interest paid components against home loan EMIs change every year, so it is suggested that check it in advance before you do your tax planning.

Tax benefits for second time home owner: If you already own a property and wish to buy another then tax benefits under 80EEA cannot be claimed. In the above example now you can claim Rs 95,000 under 80C (plus 55000 Rs.  against stamp duty paid in first year) and 2,00,000 Rs. under Section 24. However, if the purpose of home is investment and you want to lease it on rent, in that case you can claim full amount of interest component in section 24, which is Rs 2.77 lakhs in above case.

If woman member of the family invests in house: As per income tax laws, there are no specific benefits in case  a woman invests in house. She can claim all the above mentioned benefits under income tax laws similar to man. However, some state governments have given 1%-2% benefit of stamp duty if woman is the owner of house. Like in Rajasthan, if you buy a house of amount Rs 40 Lakhs then in general case the stamp duty (including other charges) is 8.8% which is Rs 3,52,000, but if any a female member of the family buys this house then she has to pay 7.5% stamp duty, which is Rs 3,00,000. So, there is one-time saving of Rs 52,000 if a woman buys the same house.

Tax benefits for husband-wife or joint purchase: If both husband and wife purchase house jointly, the income tax benefit rules remain the same in that case, however, both husband and wife can claim tax benefits in their individual files. Maximum deductions benefits cannot cross the actual amount paid, i.e. both husband and wife cannot take benefit of same payment. For example, the interest component is Rs 2.77 Lakhs and husband has taken tax deduction benefit of Rs 2 Lakhs under Section 24, then wife can only take benefit of Rs 77,000 under section 24, benefit taken against interest component can never cross Rs 2.77 lakhs, which is the actual paid amount. Similarly, Rs 95,000 is paid against principal payment, so if they want to take benefit under Section 80C so either husband or wife can take full benefit of Rs 95,000, if they want, they can split the amount as per their tax planning, but full amount benefit cannot be taken in both accounts.

Note:  Ravi  Singhal, is Vice Chairman, GCL Securities Limited, views expressed are that of his own.

Also Read: Follow these steps when buying a flat in RERA registered projects

The post Income Tax Benefits For 1st Time Homebuyers In 2021 appeared first on Square Feat India.

By Varun Singh

Mumbai’s real estate market has performed very well especially in the last three months. To be specific since the stamp duty cut that was announced by the state government.

To give perspective to the above statement one can see that in 17 days of November 2020, Mumbai had taken over entire November 2019’s sales.

What had added to the high sales apart from the stamp duty cut was the discounts that developers were offering home buyers,

The fear that crops up in ones mind is that will developer hike the home prices because the market is doing good?

If this gives any relief to home buyers and the market, it is most unlikely that developers will hike the prices.

One of the examples to substantiate this claim is the recent announcement by Ashok Mohanani, President, NAREDCO Maharashtra. NAREDCO had announced that in 1,000 projects of their members, zero stamp duty will be available till December 31.

In present system, circumstances and liquidity crunch do not allow any developer to increase prices. As such it is likely remain stagnant.

Anand Gupta , Chairperson , Housing and Rera committee Of Builders Association Of India.

We posed the same question to Deepak Goradia, President, CREDAI MCHI whether prices will go up.

According to Goradia, in the current scenario too, developers are facing a lot of hardship. Projects are still unviable for many, but they are continuing without passing the burden on to the home buyers.

Many developers are still continuing with their festive offers and according to most of them not much from their side would change till the end of this financial year.

Hiral Sheth, Director-Marketing, Sheth Creators, when asked the question whether prices may go up? She said, “While it’s difficult to comment on market prices as they depend on many criteria, developers are being support of home buyers by offering various payment schemes and other discounts. Thus encouraging more fence sitters to take the plunge.”

The general economy is still reeling under the pressure of job losses and salary cuts.

However, what has boosted the real estate sales is also home loans at the lowest interest rate in the recent past. “One thing we can surely say that the markets have picked due to several reasons such as better home loan rates, stamp duty reduction , changes in the income tax margin on circle rates,” says Developer Tejas Vyas.

On the question of price, Vyas says, “Price improvement is directly proportional to the momentum of sales. In the last 3 months we have seen unprecedented momentum. We will have to see how far this momentum picks up before judging the price rise.”

The general feeling amongst most developers shows that price rise may not happen anytime soon, in spite of the market seeing good sales. Instead the discounts and waivers will continue for some more time, till the economy is back on track.

Another reason why most developers won’t take the risk of hiking prices is because the sales is based on several aspects and their offering discounts is one of the biggest apart from the slashing of stamp duty and lower interest rates.

Also Read: 1000 Projects Offer 0% Stamp Duty Till Dec 31 In State

The post Home Prices To Go Up Or To Remain The Same? appeared first on Square Feat India.