hello everyone .... ur opinion required....
Builder selling a 500 sqft flat to our client @ 2000/- per sq.ft. ( Rs:10,00,000 /= )
actual prevailing rate is 4000/- per sq.ft. value comes to rs. 20,00,000 /= .
Agreement sale value will be 10,00,000 /= . Stamp duty will be payable as per
market value of rs. 20,00,000 /= .
In this case will section 50C be applicable on the builder as he is selling the flat
at lower value....
as sec 50 C ... covers only the transfer of the property in the nature of ‘capital asset’ leaving out of its ambit the transfer of land and building held as trading asset/stock-in-trade, as there is no deeming provision that could apply to the determination of income under the head ‘profits and gains of business or profession’
Also .... if our client is buying @ 2000 /- per sq.ft can sec 50C target the purchaser or transferee ( i.e. our client ) .... on the ground of undisclosed investment.
can A.O. invoke sec 69 in the hands of purchaser by holding that the purchase consideration declared was less than the value determined for the purpose of stamp duty and make an addition of the difference in our client hands.
I think it is better to buy only at prevailing rate of 4000 /- per sq.ft.... if the above mentioned sections can held the purchaser at default....or should the client go ahead with deal ?? .
will like to get ur opinions on this...
CAclubindia
