Capital gains

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LEO BRAGANZA (Querist)
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01 March 2014 can a body corporate dispose of a building to another body corporate at WDV without attracting capital gains tax. The shareholders are common in both the companies. Also the purchasing company holds shares in the selling company. pls advice.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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03 March 2014 If the building is transferred at WDV, then Section 50C will be attracted under which the stamp duty value will be treated as the sales consideration.

Alternative:

1. Gift the property (capital gain is exempt).

2. The transferor company should purchase shares in the transferee company and make the latter its subsidiary.
Capital gain on transfer by subsidiary to holding is exempt.