Income tax on area sharing in llp

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2018 I have formed an LLP and have purchased a land where part has been paid in money plus I have to give certain residential units to the original land owner. Now my LLP wants to give this land on Joint Venture to a developer.
1) My question is when does my ie the LLP's Income Tax liability arises (as and when I sell my share of the units or everything at once).
2) What if the LLP decides and allocates units to various partners in the LLP, then when does the tax liability arise (at possession or selling each unit or even if one unit is sold entire tax liability arises)

Nikhil Kaushik

Nikhil Kaushik (Expert)
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25 April 2018 depends on how this transaction is being pursued. If you are in the business of developing/sell real estate, then the JV should be accounting for revenue as per the applicable standards i.e. percentage completion method. How the LLP accounts for its income depends on the nature of JV and in what form the income is being transferred to the LLP