sale of plant by co.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2011 hi, a co.received part of sum in f.y 09-10 for sale of plant which was credited to capital reserve. Final sale is completed in f.y 10-11 by receiving balance consideration, which is also credited to capital reserve.
The question is how to compute capital gain on above sale?
The above sale is not a slump sale or also not eligible for sec.54 exemption.
What will be effect on MAT ?
The co. has purchased new plant at other location in f.y 10-11.
Also give some hint for showing the transaction in return of income.
PLZ. Reply Soon.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 June 2011 Please mention the date on which transfer of plant took place and the reason for crediting the capital reserve is also not clear in the absence of any balance sheet data before us.

In the return of income the sale value of the plant will be deducted from the Block of Asset, in the year in which actual transfer of plant took place. After selling the plant , if there is no asset in the block, or the block starts to show
negative balance, transfer the same to capital gain/ loss account.

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2011 Dear Sir,the date of sale deed is 1-12-2010.
And the reason for crediting the sum to capital reserve is not clear to me also.
Also Suggest, whether it will be posible to bifurcate the sale consideration between building and land as the both are seperately disclose in balance-sheet.
So if the above bifurcation took place then it will be STCG for building sale And for Land LTCG. (holding period is more than 3 yrs.)

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