30 June 2008
Sir My client bought a plot for Rs 175000 in 1982-83, he latter made a deal with a party for the sale of the said property for he which he received a sum of Rs.250000 as advance in 2001-02. But the sale couldn't be completed so my client forfeited the same and kept it with him. Now he sold the property for RS.45 lakhs in AY 2008-09. How can I adjust the advance amount with the purchase cost he has incurred an improvement cost of Rs.125000 in the year 1999-2000. How can I compute the CG in this case favoring my client
30 June 2008
it shall be deducted from the cost of acquisition and after deducting such amount indexation will apply.
SEC 51 Advance money received.
51. Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money80 received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.
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