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Capital gain

Tax queries 736 views 4 replies

if Mr. A has a plot of land with book value of Rs. 1 lakh.. Mr. A involved in partnership with Mr. B(who constructed the building on such land)..now both partners have equal share in this land and building & market value of this L & B is Rs. 6 crores..
whether this transaction will attract any Capital Gain..If Yes, then who will b lible to Capital gain..& what will b the amount of capital gain??? plz reply

Replies (4)

Q 1. "Mr A involved in Partnership with B."

As  I think just by constructing the property on A's land B does not become partner of A. 

There must be certain conditions or understanding which requires elabortion.  

Otherwise,  in the absence of any thing clearer, A is the owner and B is the builder or developer.  A may pay B the construction cost only.

Q 2.Whether A introduces the asset in said partnership ? If yes ... then How B being a partner can alone do the construction. It is the firm who carry on the construction.

Q3. Capital gain does not arise on the basis of market value. It requires a transaction of actual sale or transfer.

 

 

 

Originally posted by : Paras Bafna

Q 1. "Mr A involved in Partnership with B."

As  I think just by constructing the property on A's land B does not become partner of A. 

There must be certain conditions or understanding which requires elabortion.  

Otherwise,  in the absence of any thing clearer, A is the owner and B is the builder or developer.  A may pay B the construction cost only.

Q 2.Whether A introduces the asset in said partnership ? If yes ... then How B being a partner can alone do the construction. It is the firm who carry on the construction.

Q3. Capital gain does not arise on the basis of market value. It requires a transaction of actual sale or transfer.

 

 

 

agree with paras bafna sir..........

A is the owner and capital gain doesnt arise here...

Mr. A owned the land & Mr. B has to construct building (mall) on that...nw as per joint venture terms cinema is with Mr. A & all other shops are with Mr. B...now whether Mr. A is lible for LTCG on such t/f of land to J.V.??? Sale consideration for LTCG for Mr. A will be the price of land taken i.e. Rs. 6 crore as per J.V. agreement.. Sec 50C will apply or not??? Book Value of land at the time of agreement is Rs. 100000/-.. both are equal holder in land & building...


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