08 May 2008
Hai my name is Harish and i am pursuing my articles. recently i came across a case where Mr.x a resident in India purchases land from Mr.y who is also a resident. Mr.y is an agriculturist and does not know much about the law or tax rules. He forced Mr.X to buy the land by paying cash of Rs.1,000,000.The queries are as follows
1. whether the expense made for purchasing the land is allowed as expense to 100./.
2. whether the law provides any allowance or room for any of these expenses
09 May 2008
Land is an immovable asset and will be included in the purchaser's net assets. Any expenditure incurred by him to acquire any immovable property with an intention to retain it as an asset will be capitalized and no portion will be amortized or booked to profit and loss a/c.
Moreover, whether payment is made in cash or by cheque does not make any difference.
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