Land ?
Asha
(Querist) 22 November 2012
This query is : Resolved
A PRIVATE LIMITED COMPANY ENTERED INTO A REGISTERED AGREEMENT WITH A PARTY TO ACQUIRE A LAND WITH A CONSIDERATION OF RS. 10,00,000 /- AND MADE A PART PAYMENT OF RS. 2,00,000 /- BUT BEFORE FINAL PAYMENT AND REGISTRATION OF THE LAND THE COMPANY SOLD THE LAND TO THIRD PARTY UPON A CONSIDERATION OF RS. 12,00,000/- , NOW THE QUESTION IS HOW THE PROFIT OF RS. 2,00,000/- WOULD BE TREATED IN THE HAND OF THE COMPANY . WHETHER IT IS CAPITAL GAIN / SPECULATIVE INCOME / OTHER INCOME.
Shailesh Kr. Shah
(Expert) 23 November 2012
It depends upon object of the company.
If its main object is sale purchase of land then business profit and in case it is not main object of that company then long term capital gain/short term capital gain, as the case may be.
Prashant Kumar Jha
(Expert) 23 November 2012
I do agree with my ld friend Mr Shah ji's answer.
H.M.Patnaik
(Expert) 23 November 2012
As I understand in the instant situation,Capital Asset has not been acquired
pending transfer of ownership in the name of the Company and as such no Capital gain either Short term or Long term arises from the deal.
Further, if the main object of this Pvt. Ltd. Company is real estate business, then the income in question will be treated as Income from Business & profession or else treated as Income from other sources.
Raj Kumar Makkad
(Expert) 25 November 2012
I completely agree with the opinion of Patnaik. Capital gains can be claimed only if the assessee had obtained ownership to the property sold.
