Advance against property forfeit
This query is : Resolved
29 September 2014
sir,
we have sold a plot of land in the name of a private limited firm, the purchaser gave us certain advance through cheque in the company account and an agreement was signed between the company and the purchaser, the rest was to be paid in 6 months, but now the purchaser is not paying us the balance even after 10 months, my query is -
1. can we forfeit the advance received?
2. will it be treated as profit or capital gain?
3. if included in profit, can it be adjusted against carried forward losses?
thank you
we have sold a plot of land in the name of a private limited firm, the purchaser gave us certain advance through cheque in the company account and an agreement was signed between the company and the purchaser, the rest was to be paid in 6 months, but now the purchaser is not paying us the balance even after 10 months, my query is -
1. can we forfeit the advance received?
2. will it be treated as profit or capital gain?
3. if included in profit, can it be adjusted against carried forward losses?
thank you
CA SUNIL K GARG
(Expert)
01 October 2014
pls refer to sec 56 (2)(ix) introduced by finance act 2014, the advance forfieted will be income from other source.
01 October 2014
yes u can forefiet it and additionally sec 51 is alos applicable where it will be reduced from the cost of asset when u sell it again in future and while u calculate capital gain.
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