Capital gain
sahil kumar
(Querist) 11 March 2012
This query is : Resolved
) Assessee entered into collaboration agreement with a builder in which it is agreed that power of attorny(irrecovable) will be given to the builder for taking permission/approvals from various govt. authorities for this construction.Assessee is here receiving Rs. 60 Lacs a refundable security deposit(as fiven in the collaboration agreement).Whether this amount be liable for any tax liability?
2)Further, It was decided in the collaboration agreement that after completion of the project, Newly constructed property will be devided between assessee and builder in the ratio of 55:45.Here builder is free to sell his part(i.e.45 % of the total construction).Will there be any tax liability in this condition when assessee is transfering 45% of the property as cost of construction(in kind) instead of cash payment?.Will Rs. 60 Lacs attract any tax liability now which was given earlier?There is no intention of assessee to give back this amount to builder.
Please guide me.....
A V Vishal
(Expert) 12 March 2012
Assessee is here receiving Rs. 60 Lacs a refundable security deposit(as fiven in the collaboration agreement).Whether this amount be liable for any tax liability?
Ans. No.
2)Further, It was decided in the collaboration agreement that after completion of the project, Newly constructed property will be devided between assessee and builder in the ratio of 55:45.Here builder is free to sell his part(i.e.45 % of the total construction).Will there be any tax liability in this condition when assessee is transfering 45% of the property as cost of construction(in kind) instead of cash payment?.
Ans. Yes, there will be capital gains.
