23 July 2011
If an assessee is constructing residential property (Flats) and intends to sell them after construction as a one time activity only,the income or loss from such activity would be taxable under which head? Income From Business & Profession OR Income From Capital Gains?
24 July 2011
It is a contentious matter, but my personal view is that the person should treat it as a business income. Take deductions of all the relevant expenditures from the gross receipts and show the unsold flats as closing stock.
But then if the number of flats are very small and they are sold within a year then you can claim the same as Capital gain also.
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