As 19 leases

This query is : Resolved

A.CHANDRASEKAR (Querist)
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11 September 2012 Dear sir,

Ours is a Pvt Ltd Company. We have taken Land and Building on lease from an individual for 30 years. One time consideration is Rs. 3.35 crores. The Cost of Land and building in the books of the individual (LESSOR)is Rs 3.30 crores. As per the terms of lease agreement, the lessee (PVT LTD COMPANY) has to be return the property to the lessor after the period of lease and there is no residual value attached . The lease is transferred with all risks and rewards incident to ownership of the asset.

How should the LESSEE i.e the individual tax payer recognize the receipt. Is it capital receipt or revenue receipt?.
There is no yearly lease rentals and no interest is charged.

LESSOR: Individual

LESSEE: Private limited Company

Lease Property: Land and Building

Lease consideration : 3.5 Crores One time payment

Please clarify

Amol S Joglekar

Amol S Joglekar (Expert)
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11 September 2012 who is lessor and who is lessee? I think the pvt ltd company is LESSEE right? And why are you referring it to as "Financial Lease"? Please clarify.

Message likes : 1 times

A.CHANDRASEKAR

A.CHANDRASEKAR (Querist)
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12 September 2012
LESSOR: INDIVIDUAL

LESSEE: PVT LTD COMPANY

LEASE PROPERTY : LAND AND BUILDING

LEASE PERIOD: 30 YEARS

LEASE CONSIDERATION: 3.5 CRORES (ONE TIME PAYMENT)

Amol S Joglekar

Amol S Joglekar (Expert)
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12 September 2012 This is LEASE RENT

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