Capital Gains

This query is : Resolved

Balasubramanian (Querist)
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10 March 2009 Dear Friends,

I have one query....

My friend bought a House under Housing Board Scheme in 1988. But the Sale Deed for the same has not been executed by the Govt. in favour of my friend conveying the ownership of the house. In the meantime, during 1998 he sold the house by executing Power of Attorney in favour of a buyer (of course, sale consideration not mentioned in PoA)with an understanding that the sale deed will be executed immediately upon conveyance of the same by Govt of Tamil Nadu. Now, the Govt. has decided to convey the property through sale deed. Now, my friend would like to execute sale deed once the initial sale deed has been executed by Govt. of Taml Nadu. Now, once the sale deed is executed by my friend and the PoA holder, whether the capital gains arising out of the transaction is governed by income tax? Then what is the value of sale consideration to be taken for the purpose of capital gains tax?
please clarify

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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10 March 2009 All sales under POA arrangement is evidenced by payment recipts issued against the payment received from the buyer and handing over the possession of the propert. In case consideration is received and possession is handed over then the transaction is over and Capital Gain arising therefrom is includible in the income for the year.