31 August 2009
How sale of Un-occupied and un-registered property sold will be taxable? The Assessee (Individual) is paying advance against the property from last 4 years and now, in the year 2008-09, he has sold his right of entitlement to someone. what is the tax incidence. Will it be charged under Capital Gains / Business & Profession / Other Sources? What is the Tax Treatment? Please refer Sections with your recommendations.
31 August 2009
For Unoccupied and unregistered property it can not be said that absolute rights or general property have come to the assessee. On his payment defaults the vendor may rescind the agreement. A transaction of sale/purchase thus can't be said to be completed. Had he been allowed the possession of the property then there was no question. In the above situation it is better to treat the profits under the head "Other Sources". You may refer Section 2(47).
01 September 2009
But The cases KR Srinath vs. CIT and Vijay Flexible Containers vs. CIT putting light on the same, again creates confusion as to how it will be taxed and to my knowledge and belief the same will be taxable under Capital Gains read with sec 2(14) and 2(47).
02 September 2009
Right to obtain conveyance of property is a ‘property’ - A contract for sale of land is capable of specific performance. It is also assignable. A right to obtain conveyance of immovable ‘property’ is clearly ‘property’ as contemplated by section 2(14) - CIT v. Tata Services Ltd. [1980] 122 ITR 594 (Bom.).
Capital asset’ includes every kind of property as generally understood - The term ‘capital asset’ has an all embracing connotation and includes every kind of property as generally understood except those that are expressly excluded from the definition. So too, the meaning of the expression ‘property’. It includes every conceivable thing, right or interest or liability - Syndicate Bank Ltd. v. Addl. CIT [1985] 155 ITR 681 (Kar.).
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