Section 50c
This query is : Resolved
16 December 2015
Dear Professional Friends,
Can Section 50C be invoked to compute business income if the partnership firm is dealing in plots and the plots are heald as stock in trade?
Thanks in advance
Elroy
Can Section 50C be invoked to compute business income if the partnership firm is dealing in plots and the plots are heald as stock in trade?
Thanks in advance
Elroy
16 December 2015
Dear Section 50C will apply irrespective of the fact whether asset is held as investment or the business asset.
16 December 2015
Sections 45 to 55 are applicable for computation of capital gains.
The same view was held in the case of Neelkamal Realtors and Erectors India Private Limited by Mumbai Bench of ITAT. It was held that stamp duty valuation provisions under section 50C of the Income Tax Act, 1961 are not applicable to sale of flats as stock in trade.
The provisions of section 43CA of the Act providing stamp duty valuation for land or building or both, held as stock-in-trade wef AY 2014-15 prospectively.
The same view was held in the case of Neelkamal Realtors and Erectors India Private Limited by Mumbai Bench of ITAT. It was held that stamp duty valuation provisions under section 50C of the Income Tax Act, 1961 are not applicable to sale of flats as stock in trade.
The provisions of section 43CA of the Act providing stamp duty valuation for land or building or both, held as stock-in-trade wef AY 2014-15 prospectively.
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16 December 2015
Dear Pavan Kumar Ji,
Thank you for the detailed explanation.
The quoting of Section 43CA has risen another query. Seller is a partnership firm. buyer is an individual. Seller has sold a plot to buyer in the year 1987 through an agreement to sale. The plot was kept as stock in trade by the seller. The buyer paid full consideration in installments. The last was paid in 1998. However, the stamp duty was not paid and an agreement was not registered. Currently buyer want to register the agreement by paying stamp duty at current valuation. Whether Section 43CA will be invoked for the Seller? Can the AO demand income tax from the Seller?
Please advice
Thank you for the detailed explanation.
The quoting of Section 43CA has risen another query. Seller is a partnership firm. buyer is an individual. Seller has sold a plot to buyer in the year 1987 through an agreement to sale. The plot was kept as stock in trade by the seller. The buyer paid full consideration in installments. The last was paid in 1998. However, the stamp duty was not paid and an agreement was not registered. Currently buyer want to register the agreement by paying stamp duty at current valuation. Whether Section 43CA will be invoked for the Seller? Can the AO demand income tax from the Seller?
Please advice
16 December 2015
Mr. Joseph, take recourse of section 43CA(3).
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