Capital gain- transfer definition when possession not taken
This query is : Resolved
06 April 2015
Mr X purchased an under construction flat from a builder at Rs 4000 per sq metre. The builder gave him ALLOTMENT LETTER.
Now after 8 months, Mr X sold the flat to Mr Y for Rs 4200 per sq metre and asked the builder to get the registry done in the name of Mr Y.
Now the question is, whether this transaction would come under the definition of Transfer as per Capital Gain or not.
Pls note that Mr X only has the allotment letter and NOT THE POSSESSION LETTER.
Also, if it is a transfer, which date to be taken as the date of sale??
Pls advice.
Now after 8 months, Mr X sold the flat to Mr Y for Rs 4200 per sq metre and asked the builder to get the registry done in the name of Mr Y.
Now the question is, whether this transaction would come under the definition of Transfer as per Capital Gain or not.
Pls note that Mr X only has the allotment letter and NOT THE POSSESSION LETTER.
Also, if it is a transfer, which date to be taken as the date of sale??
Pls advice.
06 April 2015
Since X had an salable interest in the property,Transaction will be considered as transfer for the purpose of Capital Gain.Date of transfer will be the date of agreement among Builder,saler and buyer, without which builder will not transfer the property in the name of new buyer.
06 April 2015
Thank you for your reply Sir. But my question is that in the definition of Transfer as per The Act, it says when the possession is there. In this case, there is no possession, and neither in the registry, the name of Mr X will be opened.
Registry will be done thru The builder and Mr Y.
Registry will be done thru The builder and Mr Y.
06 April 2015
Dear, if you go through the definition of transfer as per section 2 clause 47 of the income tax act then you will find that relinquishment of right also amounts to the transfer and the aforesaid transaction would attract capital gain.
Message likes :
2 times
07 April 2015
Sir, Before registry, an agreement will have to be entered between yourself,buyer and builder. That will relinquishment of right by yourself and on that date capital gain will arise to you.CA K.Goel is very much correct.
Thank you sir.
Thank you sir.
Message likes :
2 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Scrutiny and reopening of past returns
- PPF interest-As Exempt Income disclosure
- Pass word to open justification report for Q1 for FY 2026-27
- Section 194JA & JB Income which ITR Form to use
- Booth for sales promotion
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Average Cost Of High Quality Diamonds
- Regarding ITR filing with more value than showing in AIS/TIS
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
