11 January 2020
The assessee is a partnership firm engaged in construction activity. In has purchased land during the year 2006-07, and has started construction in 2012 and has done work to the extent of Rs. 50,00,000. Later on due to funds scarcity, it has entered into development agreement with other company for construction of flats in 2014. Construction was completed in the year 2018 and land owner has received his share of flats and started selling its share. How to treat the same in the books of land owner who is engaged in same business. Whether to calculate capital gains or business income. Kindly explain.
12 January 2020
1. What were the terms of development agreement ? 2. Whether the firm has shown any capital gains income at the time of entering into development agreement on the basis of agreed consideration ? 3. If not,then complete the task by showing business income and leave rest upon the AO.
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