QUERY PCC TAX..

As there is no sale in respect of A, Hence in hand of A nothing will be taxable. For C, Cost of aquisition of house will be same as for previous owner, i.e. Rs. 1,00,000/-  As per section 51, If any advance money is forfeited by assessee himself then that money upto extent of cost will be deducted from cost. Balance amount if any will be treated as COA. and then Capital gain will be computed.

In respect of C, Capital Gain :-

Sales Consideration    Rs. 2,00,000

less : COA                      Rs.     90,000     [1,00,000-10,000(forfeited by C)]

                                      -------------------------

Capital Gain                  Rs. 1,10,000

dear sailesh ,

can u clarify my doubt.. 

whether amount forfeited by mr A will not be reduced from cost of Acqusition...

Yes. Amt. forfeited by Mr. A will not be reduced from COA. Because Section 51, Says only that amount of advance forfeited will reduce from COA which assessee (Mr. C) himself forfeited.

amount of consideration should reduced by the forfeited by the seller of the capital assets. amount forfeited by previous owner should not be reduced from the sale consideration

leave tension read it very carefully

 best of luck for u r exems