Capital gain on constructed property

A man has purchased a property in 1990 & after that in year 2011 he constructed the 4 storey on that building. now he has sold the 1/4th part of the land along with one storey.
now whether the gain on slae will be long term or short term?

Will Construction of property be treated as Improvement in already existing property?

Replies (3)

with reference to a case law Vimal Chand Golecha (1993) 201 ITR 442 (Raj)

in my openion you have to calculate capital gain seprately for both land and building.

 

Regards

there are other caselaw also you can refer

CIT v Lakshmi B. Menon (2003) 264 ITR 76 (Ker):

CIT v C.R. Subramanian (2000) 242 ITR 342 (Karn).

Ramachandra Rao (1999) 236 ITR 51 (Mad)

CIT v Citibank N.A. (2003) 261 ITR 570 (Bom)

For considering short term capital gain in case of Building and long term capital gain for Land at what basis sales consideration can be bifercated for computation.

Example:

If total sale consideration is 20,00,000

Land purchased in 1997 for Rs.2,00,000

And constructed building as on 1-4-16 at cost of 10,00,000 

Thank you in advance

 

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