Taxability and taxable amount - Land possession

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..... Taxability and taxable amount - Land possession
Query (Issue) Started By: - sm surana Dated:- 11-1-2010 Last Reply Date:- 15-1-2010 Income Tax
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Income Tax
Please advise the taxability issues including the year of taxability and taxable amount? Assessee bought a piece of land in F.Y. 09-10 for Rs. 8 lacs and entered into collaboration agreement. The gist of agreement is as f .....

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..... ollows : - ľ Date of agreement Sept. 2009 between assessee and developer. ľ Cost of construction to be born by developer. ľ Sharing of built up area with proportionate undivided ownership rights in land underneath. Assessee will get one floor and developer will get 2 floors. ľ Common areas will be used by both the parties. ľ Developer sha .....

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..... ll pay Rs. 10 lacs as proportionate cost of land for its share to assessee and also for equalising the share of assessee in allocation. ľ Assessee has handed over the possession of Land in Oct. 2009. ľ Developer to complete the construction within 12 month otherwise developer shall pay monthly penalty of Rs. 10,000/- to the assessee. ľ Assessee has irrevocably a .....

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..... ppointed the developer as lawful attorney in connection with construction. ľ Developer is free to negotiate with buyer (for its share) for sale. ľ Developer will issue the receipts under his signature. Reply By Surender Gupta: The Reply: IT is method of account and recognization of revenue policy that would determine the year in which your income shall be taxable. The trea .....

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..... tment of such land may also be different. Like is it a stock in trade or investment. Accordingly you may computer the income of the assessee either under the head "business or profession" or under the head "capital gains".
Discussion Forum - Knowledge Sharing .....

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