In case where the purchase of agricultural land is executed/happend before the date of transfer/sale of the agriculteral land on which capital gain arises, is assessee eligble for expmtion u/s 54b?
Satyendra Shah (Intern) (28 Points)
08 October 2017In case where the purchase of agricultural land is executed/happend before the date of transfer/sale of the agriculteral land on which capital gain arises, is assessee eligble for expmtion u/s 54b?
CA Rashmi Gandhi
(Chartered Accountant)
(86285 Points)
Replied 08 October 2017
Satyendra Shah
(Intern)
(28 Points)
Replied 08 October 2017
If someone claims that the he recived the sale consideration in advance and purchased the land out of it, in that case, is he elibile for above exemption? Please quote a case law regarding this scenario, in case any.
CHETAN JANGID
(95 Points)
Replied 09 October 2017
CHETAN JANGID
(95 Points)
Replied 09 October 2017
Satyendra Shah
(Intern)
(28 Points)
Replied 09 October 2017
Yes there will be capital gain. As per section 45(2), if the capital asset is converted into stock in trade,tax shall be charged on the capital gain on the stock in trade transferred. The acquisition cost will as it was in the hand of previous owner i.e. your father. To calculate the capital gain, sale consideration will be take as fair market value of the asset on the day of convesrion into stock in trade.
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