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2010 (10) TMI 16 - HC - Income TaxLTCG versus STCG - sale of incomplete building - The Assessing Officer held that what the assessee had transferred was a land with a building which was incomplete. The hotel building which was under construction was not held by the assessee for a period of more than three years and therefore the profit arising on sale of the incomplete hotel project was a short term capital gain. After deducting the cost of the acquisition of the land and the cost of construction of the incomplete building from the sale price of Rs.11 crores, the surplus of Rs.7,80,05,356 was held to be a short term capital gain liable for tax. The Assessing Officer rejected the contention of the respondent that it was a long term capital gain and completed the assessment treating the profit of Rs.7,80,05,356 as a short term capital gain. - Held that: - the concept of dual ownership is recognised in the sense that the land may belong to one person and the building standing thereon may belong to another - . Once the concept of dual ownership is accepted it matters not whether the construction of a building is completed or not. It also matters not whether the building is constructed by the owner of the land or by some body else - the capital gain arising out of the sale the lease hold interest in the land in incomplete building will have required to be bifurcated into the gain arising out of a sale of lease hold interest in the land and the sale of the incomplete building
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