A land owner had purchased a land in the year 1993 and in the year 2001, he had got into agreement with a developer for building 100 flats in which 40 flats will be built n given back to land owner and 60 will be retained by developer.In the year 2003, Owner gets the possession of 40 flats.
My queries:
1) When will the capital gain arise to land owner? if it s the case what will be the sale consideration ( for 40 flats or for 60 flats or for 100 flats), cost of acquisition and is there any exemption.
2)I read from a post in the site mentioning capital gain will arise at the time of handing over developed flats back to land owner by considering cost of construction incurred by developer as sale consideration and original cost of acquisition of land as COA, if that is the case we will be entering sale deed with customer( which is between owner of land & Customer) in prior, will not that give double effect?
Please guide me sir
Thank you
CAclubindia
