Proceeds from agreement to sell, which year are they taxable

A. K. De (NA)     23 October 2013

A. K. De
 29 points

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I had bought a flat in June 2003 in UP. I entered into an agreement to sell on Nov 2012. I had also bought a flat in Mumbai with the proceeds to invest the capital gains of around Rs 12 Lacs. As and when the buyer made payments, I had transferred them to my seller in Mumbai. When I went to UP to register 'agreement to sell', I realised he wants to register the property later. The aggrement to sell was registered. He completed all payments (except a token Rs 10,000) and I had to execute a power of attorney in favour of his mother. Now, in this scenario, can I still show it as a sale for me and compute capital gains and claim excemption. Or, I am just kept dangling till it's ever registered. Also, the proceed I have received (lets' call them advance) will they be taxable in the year I received them as income or only when the property is registered by the buyer.  I am assuming, it won't be income since it's just an aggrement to sale and has the possibility of being reversed, but kindly guide me what would be the law for this. Kindly help asap.

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