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Tax Implication

Tax queries 467 views 2 replies

Company A (Real Estate Compnay) who purchased the particular land at 3,00,00,000/- 3 year back.

Company A
sell a Garage to B (Individual (Who is relative of major shareholder of both Company A & Company C) ) for 50,00,000/- in the  FY 2010-11.

From B (Individual), Company C((Real Estate Compnay)which is Intercorporate Company of A) purchase same Garage for 25,00,000/-. in the FY 2010-11.

what should be tax implication for this?

Please Advice me.

Regards,

Paresh Rathod

Replies (2)

Hi Paresh Rathod,

Assuming Garage is a part of that land which Company A has bought.

              In this case Company A will get Profit / Loss in its business as It is Real Estate Business & Land is is treated as Stock. If Profit on sale then after all deduction the Balance Profit will be Taxed @ rate of 30% & if it is loss it can be carry forward for next year.

             Then In case of B ( Individual) will het Short term Capital Loss it can be Set off with any other Capital gain & balance loss can be carried forword for next year.

             For Company C if Company has bought for resale then it will be shown as stock & if it is bought for some other purpose then it has to shown as Fixed Assets.

Thanks

R Shriram

I agree with you Shriram but both company is intercorporate company & consideration is less than its sold to individual.


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