Sale of office by Pvt Ltd company

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Suraj (Querist)
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01 July 2023 Dear Sir / Madam,

A Pvt Ltd owns an office purchased in 2009 for Rs. 3 crores. It is shown in balance sheet as an asset. Now A Pvt ltd is planning to sell its office for Rs. 9 crores. How show this entire sale in books of accounts and what would be the tax implication?

Kindly guide,
Regards
Suraj

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 July 2023 Whether any depreciation was claimed during these years, or any structure made over it?

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Suraj

Suraj (Querist)
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01 July 2023 Sir, No depreciation was claimed.
What if depreciation was claimed by any assessee on office premises?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 July 2023 Declare the income under head Long Term Capital Gain, with indexation.
In second case the gain would be ST in nature, if used under any block of assets.

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Suraj

Suraj (Querist)
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02 July 2023 Thank you Rambhia Sir.
You mean to say, In second case it will treated as business income of the company that would be routed through P&L and taxed as per company tax slab rates???

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 July 2023 Not exactly. It is disputable issue. As per act it is considered as short term cap gain. But here it being plain land depreciation is not allowed and the asset is considered as investment only, so long term cap gain.

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Suraj

Suraj (Querist)
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02 July 2023 Okkk Thank you Sir.....

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 July 2023 You are welcome.

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