Capital Gain Tax. [Resolved]

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2010 06.07.2010

Dear Sir / Madam

I seek the following clarifications with reference to Capital Gain :

1. Land Owner enters into a Joint venture
agreement with a Flat Promoter.

2.The Flat Promoter in turn entered into
an agreement with a reputed Builder.

3.The Land owner is a Director in the
Flat Promoting Company as well as in the
Builder Company.

4.Land owner agrees to take 10 flats out
of 72 flats proposed.

Queries :

a) What is the consideration for the
purpose of Capital Gain in the
hand of the Land Owner.

b) What is the cost of land(Undivided
Share)for the Flat Promoter for
the purpose of valuation of Stock in
trade.

c) The implication of TN VAT on Flat
Promoter on the difference in
construction cost(by the Builder) and
the selling price (by Flat Promoter)
and at what rate.

Your reply with an illustration is
solicited.

With Warm Regards.

e.n.ananthanarayanan

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 July 2010 1. The land owner gets 10 Flats. Fair Market value of 1 flat is say 3.6 lacs (including
cost of undivided land). Consideration for the flat owner would be 36 lacs.

2. Since there are total 72 flats in the hands of the flat developer and consideration for land paid by him is 36lacs undivided land would be proportionately calculated to Rs .50
lac per flat which has remained as stock in trade.
3. I am leaving your 3rd query as unanswered for TN VAT experts. (sorrry)

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