Section 56(2)(vii) & Explanation 2 of section 43

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Ganisht (Querist)

28 December 2010 Is section 56(2)(vii) overright explanation 2 of section 43.

If Mr. B received an Asset(Building) From Mr. A(not a related of Mr. B) in Rs. 500000 But value as per stump duty authority is 1,00,00,000. After receiving that asset Mr. B Transfer that Assets to his Business.

please guide me what is the actual Value of asset in Business under section 43.

Moreover If Mr. B transfered this Land to C ltd. in consideration of Rs 0 & Rs 50,00,000 thne what is the value of land as per section 43.

Gayathri Devi

Gayathri Devi (Expert)

28 December 2010 Stamp duty valuation (say Rs. 100 Lacs) minus Cost of acquisition (say 50 Lacs)= Rs. 50 Lacs will be added to the income from other sources.

In both the cases if the difference works out to be less than Rs. 50000/- then the above provision will not be applicable.

From the above it is clear that to bring to tax the difference between the agreement value and stamp duty value the following two conditions must be satisfied i.e.

1)The transaction must take place on or after 1st October 2009 and

2)The assessee must RECEIVE such property

Ganisht

Ganisht (Querist)

29 December 2010 Dear Mam,

My question is in respect of Value of asset as per section 43, not in respect of taxable treatment as per section 56.

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