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Audit on sale of flats which was received on devlop. of land

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usha

audit assisstant

25 Points Posted on 12 February 2014

Good evening experts

Sir/Madam

I have a doubt

Assessee has entered into a development agreement and he has received 5 flats. During this FY he has received consideration of Rs. 1.50 Crores for the above 5 flats. My Doubt is wether the assessee's said consideration falls under audit U/S 44AB or not. He is a Working partner in the 2 Patnership Firms,. There from he is receiving remuneration, Interest and Profit from the said Partnership Firms. Please reply soon

Replies (1)

Milind M. Kulkarni

Practicing CA

597 Points Posted on 13 February 2014

Please clarify some of the points:

1. If assessee has received 5 flats, how has he also received Rs. 1.50 crores? Has he sold those 5 flats in the same year?

2. What is the assessee's business (or business of firms in which he is partner)? If it is not sale of flats/ real estate, then this may not be a business income.

3. You have mentioned that he has entered into development agreement. But is he a developer or land owner?

Whether the assessee is liable to tax audit or not depends on whether the Rs. 1.50 crore is his business income or sale of capital asset. Without clarity of the queries mentioned above, it is difficult to give a confirmed answer.