02 September 2010
Dear Sir's, We have suceeded in a bid opened by government of bihar, department of sugarcane industry. In cosideration of the bid amount we got land on long term lease of 60 years plus scrap plant and machineries of sick sugar mill units. On that land we are going to develop an Inland container depot. My question is whether the sale of scrap P&M will be taxable under capital gain tax and at what percentage it will be taxed?
03 September 2010
Purchase of Scrap in a open bid and the sale thereof is an adventure in the nature of trade and would be taxable as Business Income.If the plant is purchased as a scrap it would not be treated as Capital Asset. However , if the Plant is purchased as a Second Hand Plant then it would be treated as Capital Assets and profit on sale thereof would be taxable as short term capital gain (Depreciable Assets)
04 September 2010
Great answer. Actually Scrap is not consider as Capital Assets, so there would be no capital gain but business income. rate of tax is depend on which type of assesse you are. if you are a corporate assessee then it is taxable at 30 %
CAclubindia
