Income tax
YAGNESH HASMUKH DAVE
(Querist) 01 April 2014
This query is : Resolved
I HAVE SOLD LAND IN THE YR 2005 AND RECVD SALE CONSIDERATION OF RS 50 LAC IN 2005 AND 28% OF BUILD UP AREA IN KIND CONSIDERATION BEING SHOPS WHICH ARE RECVD BY ME DULY CONSTRUCTED BY BUILDERS IN THE YR 2010. I HAVE PAID LT CAPITAL GAIN OF CONSIDERATION RS 50 LAC IN 2005 AND VALUE OF SHOPS RECVD IN 2010 ON WHICH WHETHER I AM LIABLE TO CAPITAL GAIN TAX IN THE YR POSSESSION RECVD IN 2010 OR IN THE YEAR 2005 DATE OF AGREEMENT PL EXPLAIN
R.V.RAO
(Expert) 01 April 2014
The Supreme Court in CIT vs. George Henderson and Co. Ltd. (1967) 66 ITR 622
(SC) "held that in case of an exchange, the money’s worth of the property received in exchange ,constitutes the consideration for the property parted in exchange."
so ,gains accrue on completion of the exchange but not on the date of agreement, and also tax liability comes after completing the exchange.
Anirudh
(Expert) 01 April 2014
Dear Mr. Rao,
I am afraid,where from you get the proposition that "gains accrue on completion of the exchange but not on the date of agreement".
In fact there is no exchange at all. There is a straight sale and the consideration is received in money + constructed shops.
When the sale takes place in 2005, how can the capital gain can be said to arise some time later.
I shall be happy to get enlightened by you.
B.Chakrapani Warrier
(Expert) 03 April 2014
Capital gain arises in the year 2005. Sales consideration is Rs. 50 lakhs plus the cost of construction of 28% area to be built up by the builders.
