Agricultural land
This query is : Resolved
18 February 2012
one assessee has agricultural land in haryana. he converted his agricultural land in commercial land and paid the appropriate fee to the haryana govt for the conversion as per the rules of haryana govt. now what will be the treatment of the fee paid for conversion in the hands of the assessee? will it be included in the cost of the land or revenue expenditure or any other treatment?
thanks in advance
thanks in advance
19 February 2012
It can be added to the cost of the land as cost of improvement.
20 February 2012
sir, u are saying that it "can be" added to the cost of the agricultural land that means there is more options for treatment of the fee paid. pls suggest more options.
is it in the hands of the assessee to treat it on its own way?
is it in the hands of the assessee to treat it on its own way?
20 February 2012
You have rightly got my point.
.
Treatment depends upon the option of the assessee as he retains the land as capital asset or he converts it into the Stock in trade.
.
When such amount of conversion is added to stock in trade it becomes an item of revenue expenditure and may be allowed while computing the business profits.
.
.
Treatment depends upon the option of the assessee as he retains the land as capital asset or he converts it into the Stock in trade.
.
When such amount of conversion is added to stock in trade it becomes an item of revenue expenditure and may be allowed while computing the business profits.
.
21 February 2012
thank you very much sir for your support...
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