30 April 2013
by cbec: 6.2.6 If the builder instead of receiving consideration for the sale of an apartment receives a fixed deposit, which it converts after the completion of the building into sales consideration, will it amount to receiving any amount before the completion of service. This may be a colorable device wherein the consideration for provision of construction service is disguised as fixed deposit, which is unlikely to be returned. In any case the interest earned by the builder on such fixed deposits will be a significant amount received prior to the completion of the immovable property. As will form part of the consideration. interest in such cases would be considered as part of the gross amount charged for the provision of service and the service of construction will be taxable.
CAclubindia
