14 November 2007
Mrs X had purchased land before 1.4.81 and constructed building on it(Grnd + 2). Her sons formed a partnership firm in say year 2000 for constructing additional 3 floors by acquiring a TDR from XYZ ltd.Mrs X passed away in the year say 2004 and by will the property passed in favour of her sons.Now they have retained the 1st floor for their residence and the rest have been sold in the year 2006. so my question is:- a)how do i calculate capital gains tax ?
b)the firm in its B/S shows that it follows Project completion method but have not recognized revenue according to the said method so far and the land and the buld is not trf to firm. so should partners trf asset at book values and then calculate capital gains tax or.....?
16 November 2007
the assesse has acquired the TDR for constructing additional floor from this company who is into construction business.
the firm did construct additional floors though it does not belong to it because the owners of the property and the partners of the firm are one n the same person.they are not aware of tax world n its consequences.
20 November 2007
I presume that the assessee is the firm cosisting of Mrs X's sons as partners. Now the following points are not clear:
When was the floors G+2 constructed by Mrs.X?
When was the additional floors constructed by the firm?
How the sale was effected by the firm or the sons of Mrs.X. If by the firm how was it possible when the property has not been passed on to the firm from Mrs.X?
20 November 2007
yes the assesse is the firm consisting of sons of Mrs X. the G+2 structure was constructed in the year 1968. construction of additional floors started in the year 2000 and completed in 2006. the firm has recd advance for the sale of flats though the final sale agreements have not been made.
08 March 2008
The ownership is still vested with the sons of X. The gain on sale except those of additional floors will only be a longterm. In the case of additional floors, they will be short term to the extent they relate to the building.
14 March 2008
can we work out this way : The sons transfer the TDR in the name if firm on this day ie:post closing the sale agreement,to the firm and thereby attracting capital gains tax individually for conversion of capital asset into stock in trade?
CAclubindia
