Hi All,
I have tricky situation and need an answer, please help.
1. I have got into an agreement with a builder for land plus construction in Dec 2012. He made a Sale agreement for Land for 26 Lacs and Construction Agreement for 32 Lacs
2. He registered the land at govt guidance value i.e. at 6 Lacs to save the stamp duty. I paid rest of the mony for the land i.e 20 Lacs in cheque. I have receipt for the same.
3. He started the construction and i paid first 20 Lacs baased on 50% constuction which he did .
4. Later we had a dispute and then he left project in between. He absconded and we cannot trace him. We issues legal notice to him and it returned back.,
5. After waiting for 5 long years, i decided to sell the property and found a buyer for the same. However due to very bad state of construction, he decided to buy only land and no mention of construction in sale deed which got executed between me and new buyer. The sale deed is done at 40 Lacs.
Now my questions is,
1. Will i be eligible for Long Term Capital Gain
2. If yes, what will be the cost of acquisition, 6 Lacs as i purchased land as per sale deed at 6 Lacs. Or It will be total cost of Land + construction ie. cost mentioned in Sale and Construction agreement which i actually paid to builder i.e. 46 Lacs. Please keep in mind that while selling i shown it as Land as no one was willing to register a half constructed house which was damaged and not good enough to build further,
I paid 46 Lacs for the property and sold it in 40 Lacs...i hope i should be able to show it as capital loss. But sadly there are some glitches and i believe IT department can show some liniency
Appreicate your help in this regard.
Thank you,
CAclubindia
