Legal Question in Real Estate Law in India

Hi

A charitable trust has bought a property for around 30 lakhs. But the owners told to give around 15 lakhs in cheque and 15 lakhs in bearer cheque. And this smount of bearer cheque was shown in the account books of the trust as an advance given to the seller. since we did not have clear legal advice , we did the same pls let us know the legal implications in this case, And also what should we do to avoid the scrutiny from Income tax. we want to come out clean since this was mistake.


Asked on 9/18/13, 9:46 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

19.09.2013

Dear Sir / Madam,

1. The Trust must ensure that the title of the land is registered in its name, in the record of the Tehsildar / District Registrar by paying the prevailing Stamp Duty on the Agreement.

2. The Trust should obtain a receipt from the Seller stating that he / she has received the two amounts of Rs. 15 lakhs each) in full settlement of the "purchase consideration". The Trust should submit this receipt and the Sale Agreement along with the reply to the Income Tax Notice as evidence that the payment was genuine.

3. The Accountant of the Trust has rightly accounted the payment as an "Advance" till such time as the procedures as in Points (1) and (2) above have not been completed.

Regards,

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Answered on 9/18/13, 8:27 pm


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