business income v/s. capital gains

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2011 One of my assessee has purchased an immovable property jointly with other family members. He has shown the said investment in an immovable property as Purchases and carried into Stock-in-trade. In the next year, he sold the said property and shown as sales and offered the income as business profits. However, income tax officer is of the view that this income should be offered as capital gains. Since the said investment has been made jointly with other co-owners, either the said income (including share of other owners) can be assessed under AOP status or the income (his share) should be assessed as capital gains. What's the legality?

U S Sharma

U S Sharma (Expert)
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21 July 2011 collect the nature of payment by the assessee towards the acquisition of property, and only the portion paid by assessee is liable for his own income / capital gain

U S Sharma

U S Sharma (Expert)
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21 July 2011 also within 36 months of sale, its stcg, so no additional tax burden should arise

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