A Company doing construction business sold property to its director and his relative for a consideration which is less than the value adapted by Registrar for stamp duty. Can the difference be added as income in the hands of the company under the head "BUSINESS AND PROFESSION" ?
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Business income
Replies (2)
Provisions of section 50C are applicable only for computation of capital gains in real estate transaction in respect to seller only and not for purchaser
- Section 50C creates a legal fiction for taxing capital gains in the hands of the seller and it cannot be extended for taxing the difference between apparent consideration and valuation done by Stamp Valuation Authorities as undisclosed investment u/s 69 in the hands of the purchaser
ITAT, AHMEDABAD BENCH ‘B’ AHMEDABAD
ITO
v.
Harley Street Pharmaceuticals Ltd.
ITA No. 2492/Ahd/2007
March 16, 2010
i differ from govind as it is a construction com. the profit is considered under business or profession n not capital gain...hence sec.50C will not b applicable....
now u/s. 40A(2) this diff will b added as the benefit is given to the related parties...
so u r right...it will b added to business or profession of the co.
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