20 February 2015
I am facing a problem regarding the following situation in one of our client :-
Our client is a company dealing in Plotting business, company has policy to take advance payment against the plot to be allotted but in the particular case the company has taken Advance against booking of Plots from the customer of Rs.35Lacs , now the customer is not paying any thing so the deal has been cancelled and the amount is written off by the company and recognized as Income . My questions is following :- 1.whether the same is considered as Business income or Income from other sources ? 2. Suppose company is in Real Estate business than, Whether the same can be adjusted toward work in Progress ? 3. what should be Tax Treatment in this Case for the same if the advance from whom is taken is written of by the Customer in his Income Tax Returns as Short term capital loss and there after the same is written off by the company ? whether it should be considerd as Short term capital Gain in the hands of company or Business Income ? 4.whether section 269S/269TT of income tax is to be attracted ? 5. whether any other provisions of Company Act is applicable in the particular case ?
CAclubindia
