06 August 2009
AN ASSESSEE PURCHASED AN OPEN PLOT OF LAND IN THE NAME OF HIS MINOR SON AND CONSTRUCTED THE COMMERCIAL PROPERTY (shopping complex) ON THE SAID PLOT AND REPORTING THE RENTAL INCOME FROM THE SAID PROPERTY IN HIS RETURN. NOW HIS SON HAS BECAME MAJOR. SINCE THE SAID PROPERTY IS IN THE NAME OF HIS MINOR SON THE PERMISSION FOR CONSTRUCTION IS OBTAINED IN HIS SON'S NAME AND HIS SON IS THE OWNER OF THE PROPERTY AS PER MUNICIPAL RECORDS AND RECORDS OF REGISTRATION OFFICE. BUT FUNDS USED FOR PURCHASE OF PLOT AND COST OF CONSTRUCTION BELONGS TO FATHER. NOW FATHER (ASSESSEE) WANTS TO GIFT THE SAID PROPERTY TO HIS SON.WHAT IS THE CORRECT PROCEDURE OF GIFT? can we gift the said immovable property (ie., shopping complex) merely book entries as per value recorded in the a/c books of the assessee? How Register the gift deed since the property is already in the name of son.
06 August 2009
The Title on the ladn is already with the Son - Only the investment for constrcution on the proerty belongs to father he can declare his ( Gift ) relinquishment of his claim for return of the investment and he can declare the same in his account books and submit required declaration to that effect before ITO and where ever required- that he has no claim what so ever over the proerty in the name of his son and his son is the absolute exclussive owner & Possesor of the proerty.
In my view, in the eye of the Law this transactions called as Benami Transactions. But Benami transactions with in the family valid transactions. In this case father can execute the Deed of Declaration in favour of his son. This document is sufficient for having good title in the name of son.
08 August 2009
Dear Jithendra Ji , It is true that land andBuilding are in the name of Son only - But only the Construction invesment is made by the Father and recorded in his Accoutn Books as investment and income of minor Son in his returns - fahter can relinquish his claim for return of amounts form his son or he can declare that that amoutn (vlaue) is gifted by him to son !