17 November 2009
Suppose a person in the business of construction acquires a land and construction on it for 1.00 cr out of which is 20.00 lakhs is for construction for building on it now if the developers finds that this building is of no use and demolish the same will he get this amount of Rs 20.00 as deduction say suppose a building rebuild is sold for Rs 3.00 cr please note that this amount of construction ( 20 lakhs) is mentioned on the agreement of land and construction on it purchased by the person
17 November 2009
Cost for the business is Rs1.00 cr further expenses only adds to the cost of construction The difference between cost and sale proceeds is the profit of the business. If only the building in question is your issue then the cost of the building Rs20.00 lacs plus further expeneses thereon will be the cost for the building alone which alone when sold will bring in the sale proceeds.
CAclubindia
