Capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2013 Assessee has sold a residential flat in the F.Y.12-13 (A.Y.13-14) and has L.T. Capital gain of 2 Cr.He has invested Rs.2 Cr. In another residential flat and claimed exemption under section 54 in the F.Y.13-14 ( A.Y.14.15) well within the time limits. The bldg housing the said new residential flat has gone for redevelopment in the F.Y. 13-14 (A.Y.14-15). The assessee shall get a new res. flat with additional area. whether the handing over of the possession of the flat to the developer will be treated as transfer for Capital gains purpose. In which case the assessee will have to pay Capital gains on the previous sale i.e. 2% of 2crores i.e 40 Lacs, since the assessee will be presumed to have transferred /sold the flat he had purchased by claiming exempt under section 54. Is it the fault of the assesee ?Also, will the fact that the assessee will be getting a new flat be taken and will he not be liable to pay Capital gains tax.

CA. RAGHAV GARG

CA. RAGHAV GARG (Expert)
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27 June 2013 Handing over flat for redevelopment will not amount to Transfer. That property solely belong to assesse and title or right is not shifted to the contractor.

Raghav@ggassociates.in