Capital gains

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This query is : Resolved

Debashis Mandal (Querist)

23 February 2013 Respected Experts,

If an assessee has got a plot of Land which he purchased for Rs.500000/- & subsequently he given that land to a promoter for construction - now after 2 yrs. the construction has been completed, Then the promoter has given to that assessee a complete residential flat which has got a sale value of Rs. 2000000/- absolutely free of cost which is the consideration for such land he used to build other flats sold to other persons - again after 1 year such assessee has sold the said flat - for a sum of Rs.2200000/-
Then when the Tax incidence will occur in the hands of the assessee
1. when the promoter has given that flats possession to that assessee
2. or when the assessee has actually sold the flat to some other person.

Pls clarify
Thanks
Debashis Mandal

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

23 February 2013 It can be said to be a case of exchange.
.
Here the land has been transferred to the promoter and against such land the consideration being received is the Flat of Rs. 2000000/-.
.
We can say that the exchange got completed when the flat is handed over to the land owner. To my view, until the flat has been constructed, its value could not be determinable.
.
STCG arises- at the completion of Exchange.
20-5=15 lac.
.
On subsequent sale after 1 year , again Short Term capital gain will arise of 22-20= of Rs 2.00 Lac.

Debashis Mandal

Debashis Mandal (Querist)

24 February 2013 Sir

Is not in this case the same sale consideration in the hands of the same assessee in one case a sales consideration & in another case such sales consideration becomes the cost in his hand.

Thanks
Debashis Mandal

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