Income classification under which head

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o p bansal (Querist)
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23 July 2011 If an assessee is constructing residential property (Flats) and intends to sell them after construction as a one time activity only,the income or loss from such activity would be taxable under which head? Income From Business & Profession OR Income From Capital Gains?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 July 2011 my view ,If it is one time activity and it will be covered under sale of capital asset under Income from capital gains

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CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
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24 July 2011 It is a contentious matter, but my personal view is that the person should treat it as a business income. Take deductions of all the relevant expenditures from the gross receipts and show the unsold flats as closing stock.

But then if the number of flats are very small and they are sold within a year then you can claim the same as Capital gain also.

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