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Income from sale of property

Deepanshu Garg (Student) (273 Points)

10 July 2024

2 clients purchased a plot together for 70 lakhs & constructed home on it for 50 lakhs & sold it for 1.4 crores.
This is their business not capital gain transaction.
Now, their turnover is 70 lakhs each & profit & 10 lakhs each.
Can they file under 44AD or should they file under 44ADA or do they have to file ITR normally ?

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9 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 10 July 2024

How the house property was sold? whether both together signed the transfer document?

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Deepanshu Garg (Student) (273 Points)
Replied 10 July 2024

Yes. in sale document both were sellers.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 10 July 2024

When a single property is sold by two owners, their business activity will be either in partnership or under AOP. How can it be indipendent bussnesses?

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Deepanshu Garg (Student) (273 Points)
Replied 10 July 2024

Yes.
But my query is whether we can use 44AD or 44ADA or not ?
Or do we have to file normally in ITR 3 by making p&l and bs ?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 10 July 2024

The PAN of both individuals are different. Both proprietors cannot do independent business in one house construction, so for their joint business ITR 3 is not eligible. They have to get PAN & GST no. ( business of 1.40 Crs. require GST no) for their partnership firm for doing joint business, then question can be thought of whether the sec. 44AD is applicable over partnership firm or not.