Profit on sale of land not put to use -urgent

This query is : Resolved

CA.Tarun Maheshwari (Querist)
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14 September 2011 Whether its capital gain or business gain? The asset i.e Land was never put to use, and it was sold within a period of 3 years. Although it was purchased with an intention of business, but business could not be started. And land was to be sold. Pls tell me whether AO will treat this as Capital gain or will it be treated as gain on sale of fixed assets (business profit)

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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14 September 2011 THE WHOLE THING DEPENDS UPON TWO FACTS
1. TREATMENT GIVEN IN THE B/S
2. THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE
PL SHARE THE DETAILS

CA MANOJ GUPTA
JODHPUR
09828510543

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Querist)
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14 September 2011 Sir, no business was done in the company. So it doesn't make any difference whatever be the nature of business of the company is. This is sure that nature of business was not of investment. But as the business was not done at all, the AO may treat this as investment. In BS, we have shown this under Fixed Assets 9with 0% rate of depreciation)

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CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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15 September 2011 THEN IT WILL TAXED AS STCG