Sale of ancestral land afer converting into building

This query is : Resolved

Sonal Chavda (Querist)
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01 May 2014 Hellozz..

One of my friend having his Ancestral land, and now on land he constructed a Residential Building.
And sale the Flats of Building..
Then What about its Taxability???

And Construction is not business of him, Thus I think Land converted into Building can't transfered into STOCK IN TRADE.
Whethere it is treated as Capital Gain???

Plz Guide me about this..Soon as possible

Thanks in advance..

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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01 May 2014 The query asked is not so simple as it looks on its face.
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You may refer the following link :
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http://www.indiankanoon.org/doc/152978292/

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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01 May 2014 Better have advice of an expert to avoid future litigation.

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Sonal Chavda

Sonal Chavda (Querist)
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02 May 2014 hello sir,

As you Replied that it should be tretaed as business Income...

But as per my view He is not a Real Estate Developer and Reconstructing his own property and selling it won't attract business income..

Is it correct??????

plz Guide me....abt that..

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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02 May 2014 If you refer the link then you would realize that lot of controversies can arise and until the matter is analyzed in-depth; it is tough to give any opinion thereon.
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From the link you will come to know that AO's opinion is always different than the assessee because he generally remains REVENUE minded.
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In my opinion, your case falls under A VENTURE IN NATURE OF TRADE.
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However; if a single house is constructed and then sold; the case may be different than the existing case where so many flats have been constructed.
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Sonal Chavda

Sonal Chavda (Querist)
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02 May 2014 yop...sir....

You are right about that and I read that link given by you...

thank u very much....sir