Dear Collegues,
I have an situation which needs guidance from the enlightened professional forum. A person received money which is in excess of the Guideline value of the property at the time of entering into agreement to sell. In turn against the advance received, executed a power of attorney to the builder company to obtain necessary permission to demolish the existing structure and obtain planning permission towards future construction. However, in the meantime the advance received was utilised towards purchase of property;
Simultaneously, the demolision permission was obtained, building was demolished and the vacant land was sold in the next previous year in three equal portions to a third party by the Power of attorney holder i.e. builder company for a value which is less than the advance paid. The person purchased two properties out of the above advance received
The assessing officer assessed the entire advance received as sale consideration (which infact the person also by mistake declared it as sale price) and taxed the difference as capital gains and allow the highest value of property towards exemption and tax the balance.
What is the implication under income tax act towards excess money received towards advance from builder company? if the balance money is still payable / refundable considering the value adopted by the builder company, whether the person can get the benefit of the liablity on the confirmation of builder towards outstanding excess advance.
Pls advice
