02 November 2011
An Assessee had a property which was used for business purpose (medical) till 31.3.2007. After that Assessee transferred that property from Properietorship to Individual. He claimed deprication till the year 2007 and could not claim it thereof as he didnt use the property after 2007. He rented the property from 2007 and now he wants to sell it to an individual.. The property is purchased in 1998 and he intends to sale the property and the amount he receives wants to invest in house property . WHAT WILL THE TAX IMPLICATION FOR THE ASSESSEE?? IS THE TRANSFER OF PROPERTY IN THE YEAR2007 VALID? THE GAIN ARISING THEREOFF WILL BE LONG TERM/ SHORT TERM?? WILL HE GET ANY BENEFIT FOR THE INVESTMENT IN FUTURE?
I think there is no typical case , In this case Long term capital gain arises and for this purpose the date of cost of acquisition will be date of Purchase in 1998. Secondly i do not understand the transfer in the year 2007 if the assesee is the same. so please see whether proprietor and individual are diferent assesee if not than there is no transfer arises in 2007.
03 November 2011
that transfer is from properitorship concern to individual.. and it will grateful if you refer to any particular provision or case law for the same!
06 November 2011
Individual and Proprietor are the same assessee in the Income Tax.
I agree with Expert Ranjan's advise. In this case you can apply indexation by taking the WDV as Cost of Acquisition.
Since the property is rented in the later years the character of asset has changed from the Depreciable to a Non-Depreciable Asset.
You can get exemption by investing the Sales Consideration in a residential House Property U/s 54F provided the assessee is not having presently more than one residential houses.
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