19 May 2010
one of my client has plot which is considered as long term capital asset later on he construct a building and incurred amount in FY 2008-09, 2009-10, and sold the same in FY 2009-10 Tel me for the purpose of exemption u/s 54/54F whether it is considered as long term asset or short term asset i.e considered as plot or residential house or any other way to calculate the capital gain/loss.
19 May 2010
As per CIT Vs Dr. Ramachandra Rao's case (1999)236 ITR 51 (Mad) land is to assessed as long term and building as short term. Since building is short term, section 54 benefit cannot be availed. On the other hand, since land is long term section 54 F can be availed.
19 May 2010
agreed. On the same lines 2 capital gains will arise breaking the consideration(if not specified in sale deed) in 2 parts- one for land & other for building.
CAclubindia
