Capital / revenue receipt
This query is : Resolved
13 August 2007
Kindly clear my doubts about following :
1. In a collaboration agreement with builder , an advance is received by the party before the execution under the agreement. If contract is not executed by the builder and advance is forfeited, what will be the treatment of advance received by the party.Will it be a capital receipt- not taxable or revenue receipt taxable in the hands of party? If the contract is given to some other party subsequently , will it change character of the advance received from the earlier builder ?
2.A security deposit is received from the tenant with a condition that landlord will construct a floor in the market place on his building and let it out to him for a period of at least 3 years on a particular monthly rent.On completion of floor, the tenant does not take the possession and security deposit is forfeited and building is let out to some other party after some time . What will the treatment of security deposit forfeited ?
From
Ram Bhuvnesh
Email- rambhuvneshfca@yahoo.co.in
1. In a collaboration agreement with builder , an advance is received by the party before the execution under the agreement. If contract is not executed by the builder and advance is forfeited, what will be the treatment of advance received by the party.Will it be a capital receipt- not taxable or revenue receipt taxable in the hands of party? If the contract is given to some other party subsequently , will it change character of the advance received from the earlier builder ?
2.A security deposit is received from the tenant with a condition that landlord will construct a floor in the market place on his building and let it out to him for a period of at least 3 years on a particular monthly rent.On completion of floor, the tenant does not take the possession and security deposit is forfeited and building is let out to some other party after some time . What will the treatment of security deposit forfeited ?
From
Ram Bhuvnesh
Email- rambhuvneshfca@yahoo.co.in
13 August 2007
Definately in yours 1st case it will be treated as revenue receipt because after forfeiture ,receipt as advance will loose its charaterstic i.e party can not claim for its recovery.
In second case also response will be same.
* But it must clear that Advance/security deposit should not substitute as an advance from second party.
In second case also response will be same.
* But it must clear that Advance/security deposit should not substitute as an advance from second party.
13 August 2007
Why the advance received and forfeited will not be a capital receipt non taxable?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Event company query
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
Trending Online Classes
CAclubindia
