Hi,
Mr. A owns a piece of land.
Mr B (a builder) approaches Mr A.
Mr B and Mr A enters into an agreement where by Mr B will construct three floors on the land owned by Mr. A.
Mr B will bear all the cost of construction and will also pay a sum say Rs 10 Lacs as consideration to Mr A and in turn Mr A will give him one floor.
Query :
1) What will be the treatment of Rs 10,00,000 given as advance?
2)Mr B sells the floor given to him by Mr A. Since the property was owned by Mr A the consideration will be taxable in the hands of Mr A. What will be it's treatment??
3) If Mr A also sells a single floor, how will the Cost of acquisition be calculated?
CAclubindia
