Interesting capital gains query

CAPITAL GAIN Query

Mr.X became tenant of the shop (purchased under pagri system) in the year 2003, in the year 2011 he became owner of the shop on account of redevelopment (registration & possession in 2011) in the year 2011.

Query:-

1) Whether any capital gain arises on tenant becoming owner of the shop on account of redevelopment (As ownership is completely transfered in the assessee’s name)? If so, whether short term or long term & what is the base? 

2) Now as Mr.X is the owner of the property, wants to sale the above shop whether there will be short term or long term capital gain, because he became owner in the year 2011, but he was tenant of the same shop since 2003.

IF POSSIBLE GIVE CASE LAWS....

 

Replies (4)

if x sold dat property den STCG is taxable in his hand as he become owner in the year 2011...

pagri is basically treat as security...it does't mean dat property is transferred..

 

my frnd lalit, actually when x becomes owner he transfers his tenancy rights in favour of developer so according to me long term capital gain arises & after that short term when x sales it.....But here Mr x recevies shop for shop so can he avail the benefit of Section 54F... as this section mentions that deduction can be availed only if a residence property is purchased......?????? 

Mr. Jaideep,

Sale of tenancy rigts is a capital receipt and not taxable. Hence on becoming the owner, Mr. X would not have to pay any tax. However on sale of property he ill liable to STCG

hi, dhruv .. can u give case law for the above query..?

 

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