Capital Gain

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This query is : Resolved

suraj (Querist)

21 October 2008 Assessee want to demolish the depreciable building n later want to create shopping centre. Then he is going to sell shops what type of gain occures? short/long term? What is the treatment of cost of original bldg as well as new constructed bldg?

If the same situation is there n assessee wants to demolish personal building then what will happen in that case?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

22 October 2008 In case the depreciable asset(Building) is demolished then the same may be adjusted against any othe building in the same block or treated as a short term capital loss u/s 50. The new building erected on the land may be dealt seperately and the gain on sale may be ST or LT depending upon the period of holding of the asset. In such a case land and building are also to be considered seperately. Any short term capital gain arising therefrom may be adjusted against the loss(STC loss) from demolishion of earlier building.

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