ABC PVT LTD COMPANY IS UNDER THE BUSINESS OF REAL ESTATE, ABC PVT LTD HAVE LAND IN THEIR WORK IN PROGRESS AND CIRCLE RATE OF THAT LAND IS RS 46000/- PER SQ MT.
NOW, COMPANY PQR LTD WANTS TO ACQUIRE 70% SHARES IN ABC PVT LTD, PLEASE LET ME KNOW WEATHER WE HAVE TO VALUE LAND AS PER RULES 11UA OF INCOME TAX ACT.
AS PER OUR CONSULTANT RULE 11UA DOESN'T TALK ABOUT LAND I.E. WIP IN BUSINESS. PLEASE REPLY
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Valuation of unquoted equity shares
Replies (3)
Rule 11UA(1) talks about the immovable property held as a capital assests. Hence land which forms part of inventory for real estate company will not be valued at it's stamp duty value i.e. as per 11UA
Is there any provision under income tax act which covers immovable property as inventory
NO. it all depend upon how the classification of the immovable property done by the company in the balance sheet. and nature of business into which the company is engaged into
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