Regarding Sale And Purchase of Residential Property

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Saurabh Agarwal (Querist)
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14 January 2020 Dear Members,

I have a query regarding Purchase and Sale of a Residential Property and would be very grateful if you all could put some light on to it.

Ours is a family business and my father is buying a home worth 4.5 Cr in which we would take a loan of 3 Cr from the bank.
At the same time we would sell the house in which we are living at a rough price of 1.5 Cr within a period of 1 year after purchasing the new home.

This amount of 1.5 Cr we would want to use in our business after a span of 1 year but as per our CA this 1.5 Cr would be applicable for Capital Gain.

My question is that when we are already buying a residential property and taking a loan of 3 Cr and selling a our exiting house within a span of 1 year then why will Capital Gain be applied to the 1.5 Cr what we will get after selling our existing home. Pls suggest

Amol S Joglekar

Amol S Joglekar (Expert)
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14 January 2020 Your contention is correct.

Amol S Joglekar

Amol S Joglekar (Expert)
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14 January 2020 See, this window of in all 3 years (1 year before or 2 years after) is very critical. Many case laws suggest that mere possesion is not the confirmatory test of transfer of asset. So to say I suggest that you better ask your CA why he is contending so,

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