Dear friends
I have an interesting tax situation where I invite your comments : my client, a company, owns a large tract of land. A builder / promoter has requested it to contribute the land in a joint venture project wherein he will construct blocks of flats on the land. In return, my client will receive 40 % of the constructed flats as his share of the joint venture. The client may sell or retain his share of the flats. The client shall be leasing out the land in the joint venture for, say, 99 years. The joint venture shall span atleast two to three financial years.
The question for your consideration is :
What shall be the tax treatment of this transaction in the client's books, specially on the capital gains issue.
Also, I would be obliged if any of you have a copy of the agreement which was entered into between the parties in a situation similar to the above and could pass the same on to me. Thanking you all in advance..
Ajay
CAclubindia
