Property purchased jointly

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2013 R Sir
Good morning
i and my friend sukhi purchase one plot With executed stamped agreement duly witnessed in march-2006 Rs 25 lakh, in the ratio of 2:1,the land was transfer in my name for Rs 7 lakh but we in our capital a/c put the plot for actual price paid i.e.25 lakh in the ratio of 2:1 (16.66+8.33) now how income tax dept see when we sale for 67.5 lakh what cost will be deducted from sale concentration for calculating LTCG PLEASE ADVISE WHAT SHOULD WE DO OR HANDEL OUR ACCOUNT'S ,. how both will show it
SUNITA GUPTA
26/11/2013

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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26 November 2013 Before arriving at any conclusion, let us clarify the situation.
.
What we understand from your statement is-
1. March 2006- Plot Purchased By Sunita and Sukhi; 2:1; 16.66 & 8.33. Not shown the asset in the balance sheet but the amount has been debited to the capital account.

2. "Land was transfer in my name for Rs.7.00 lakh." Now clarify-
Q1. Whether any document evidencing the transaction has been executed ?
Q2. If yes- Provide exact Date.
Q3. Clarify the ownership or share in the Plot after such transfer.
Q4. How in your accounts the receipt of Rs 7.00 Lac has been shown ?
.

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2013 R sir
good morning
THANK ES FOR YOUR ATTENTION
1, THE PLOT HAS BEEN SHOWN AS ASSET IN OF THEIR INDIVIDUAL BALANCE SHEET FOR Rs 16.66lakh,8.33 lakh
2,The land was transfer thro regd sale deed executed on 30/3/2006 and registered on 10/4/2006 AT SUB REGISTRAR OFFICE
3, The share of owner was thro a mutual agreement signed between us on a non judicial stamp paper of Rs50/- in the ratio of 2:1
4, i do not understand the receipt of Rs7 lakh as we are s appose to receive amount on proposed sale at market rate or circle rate

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 November 2013 Thanks for the point-wise reply.
.
Both of us are unable to understand about the matter of Rs.7.00 lac. Leave it aside.
In case it is a transaction between Sunita and Sukhi, it can be treated simply as an advance.
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The amount being receivable on sales as per your query is 67.5 lac. From this indexed cost of acquisition (ICA)i.e. (2500000+ Stamp Duty and Registration Charges paid on 30.3.06 or earlier) has to be deducted.
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You can compute ICA as 2500000x 939/497
[CII OF FY 2013-14=939]/[CII OF FY 2005-06=497]
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CII =COST INFLATION INDEX.
.
LTCG =67,50,000-47,23,340=2066660.
.
LTCG has to be apportioned in the ratio of
2:1.
.

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2013 my humble quarry is we have invested Rs 25 lakh and we have original regd sale deed dt10/4/2006 for rs 7lakh
now propsed sale deed will be 67.5 lakh
then IN LTCG CALCULATION COST OF PLOT WILL BE 25 OR 7 LAKH