real estate

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sri (Querist)
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21 March 2011 my friend started a realestate business under proprietorship concern in the tittle of sri developers and he done the activities that he purchase a land and registered under his name developed it and divided into sites and sale those sites?
My Question is
1) Is sale of site consider as capital gain or stock in trade?

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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21 March 2011 Hi,

Since the intension was to do Business & therefore the purchaseof Land, it has to treated as Stock in trade.

Concept of conversion of Capital Asset into Stock in trade & thereby attracting the provisions of Capital Gains Chapter will not apply.

Thank you,

Regards
CA. Lohith. J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons