Advance money received u/s 51

cost of acquisition Rs 10000

Sale consideration Rs 20000

Advance money received From purchaser  Rs 15000... purchaser could not give rest of the amount so his advance was forfeited.

 

now. cost of acquisition for seller would be NIL... As the forfeited amount will be deducted from cost of acquisition.

MY DOUBT here is that what will be the treatment of the excess of forfeited amount over cost of acquisition (10000-15000)

i.e Rs 5000.. is it taxable?

Replies (3)

DEAR mayank

if 15000 is more than the fare market value of assest then excess amount shall be taxable in the hands of assesee otherwise it's exempt from tax

HI MAYANK,

 

IT WAS HELD IN SMITA N. SHAH VS. CIT (2005) THAT WHERE AFTER DEDUCTING ADVANCE RECEIVED FROM COST OF ACQUISITION, IF IT COMES TO MINUS, THEN THE COST OF ACQUISITION WOULD BE TAKEN AS NIL.

 

HOWEVER, EXCESS SHOULD BE TREATED AS INCOME FROM OTHER SOURCES AS THIS IS A RESIDUARY SECTION.

 

REGARDS,

 

MANOJ

thank you

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 September 2026
Article/ Paid Assistant

Murali and Sumeet Chartered Accountant

Bengaluru

CA Foundation

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
09 September 2026
SENIOR AUDITOR & ACCOUNTS MANAGER

Anupam Parashar & Co.

Ghaziabad

CA Final

View Details
Company
ARTICLESHIP 01 September 2026
Articles

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Foundation

View Details
Company
08 September 2026
Semi-Qualified Assitant

Subrahmanyam & Sivudu CA Firm

Hyderabad

CA Inter

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details
Company
ARTICLESHIP 15 September 2026
Freelance Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details