Capital gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 August 2012
I have purchased a domestic private limited company and paid total amount Rs. around 2 Crore in April 2009, the company has only one house property has book value Rs. 20 (purchase by the previous owner in April 1994) Lacs only the indexed cost of acquisition as on day is around 60 lacs.

My questions are:

1.What is the value of the property 2 Crore or 20 Lacs, for calculating capital gains.
2. beginning year for the calculation of cost of acquisition.
3. I am not selling company but only building in this company.
4. My Sales Price is 4 Crore.
5. is there any capital gain?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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27 August 2012 1. The capital gain arises in the hands of the COMPANY and NOT in your hands.

This is becuase you are the owner of the shares in the company. You are NOT the owner of the assets of the company.

The company itself is the owner of the building.

2. The cost of acquistion of the building is Rs. 20 lakhs. It will be indexed.

NB: Rs. 2 crore is the cost of acquisition of the shares of the company, NOT the building.

3. Capital gain of Rs. 1.4 crores shall arise in the hands of the company.

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