'Apartments can be used for professional services'

We are a partnership firm carrying on profession from a residential flat. We have a number of staff members and are using them in rendering professional services. Can municipal authorities take action against us for change of user?  Can the society charge us more?
Even though professional services are being rendered with the help of staff, it does not change the analogy that a professional activity is not commercial activity. Since the use of even the entire residential flat for carrying on professional services does not tantamount to change of user, the municipal authorities cannot take any action against you.  The society has no power to charge any extra amount, whether there is a change of user or not.

— Tarun Ghia is a chartered accountant and can be reached at ghiatarun@rediffmail.com. Pradnya Vairale is an advocate and can be reached at advpradnyag@gmail.com





























Before the formation of our society, there were many transfers by the original flat purchasers from the builder. The builder had collected transfer fees in respect of such transfers. Can the society claim such money collected by the builder?
A flat booked under construction and the relevant documents having been properly stamped and duly registered gives the flat purchaser an absolute right to sell or otherwise transfer the flat without any permission from the builder. The law does not support collection of transfer fees or no objection fees at the time of such transfers of flats, by original or subsequent purchasers either during construction stage or thereafter, before the society or other housing organisation is formed. However, if such amounts have been paid, one will have to have evidence of such collections. The person who paid such money would only have the locus to demand the same back and to take other legal actions.
Gifts received from which relatives are not taxable?
Section 56(2) of the Income Tax Act, 1961 inter alia provides that sums received without consideration from following relatives are not income:
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi).
However, one  should note that Section 56(2) provides that amounts and specified properties received from non- relatives, but for the exceptions provided in the said section,  are incomes but no where in the Income Tax Act,1961 it is provided that gifts received from relatives are not income and therefore tax free. Therefore, it is not a case that section 56(2) places the gifts from relatives beyond taxing provisions. If gifts are received from specified relatives, the recipient will have to prove genuineness of such gifts with reference to identity of the donor, capacity of the donor, source of funds of the donor, etc.