madhavvan (service) (154 Points)
06 June 2009an assessee has purchased land which is registered in his name for development and construction and sale of flats in 2001. in last 5 years nothing has been done for further development the land is as it is . ( his memeorandum contains main objects of developing properties and sale of flats)
now in 2009 he wishes to sell the land whether this sale will be chargeable to tax as capital gains or business income
CA Lovenish Bansal
(JOB)
(343 Points)
Replied 06 June 2009
Object clause in Memorandum has not such Importance for taxation purpose. what important is how you deal it in yours books. If such flats are shown as stock in trade than profit on sale of flats will be treated as income from business & profession.
Thanks,
CAclubindia
