Development agreement

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Tazin (Querist)
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03 December 2014 Dear experts my client who is individual has purchased plot of land for construction of residential houses. He is also a partner in a firm which also carrying on the same business. In the firm other partners are his wife and his father. Now he wants to enter into development agreement with the firm for construction of residential houses. Please tell me can he do so? If yes what is the tax consequences for both the parties the individual and the firm?

Amol S Joglekar

Amol S Joglekar (Expert)
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03 December 2014 He can very well do so. Nothing is there to restrict them.
Since it is a related party transaction, Domestic Transfer Pricing may come into play if the transaction satisfies the monetary limit.

Tazin

Tazin (Querist)
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03 December 2014 Thank You very much for the reply.

Amol S Joglekar

Amol S Joglekar (Expert)
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03 December 2014 You are welcome..
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