Paresh Rathod (CA) (222 Points)
19 April 2011Company A (Real Estate Compnay) who purchased the particular land at 3,00,00,000/- 3 year back.
Company A sell a Garage to B (Individual (Who is relative of major shareholder of both Company A & Company C) ) for 50,00,000/- in the FY 2010-11.
From B (Individual), Company C((Real Estate Compnay)which is Intercorporate Company of A) purchase same Garage for 25,00,000/-. in the FY 2010-11.
what should be tax implication for this?
Please Advice me.
Regards,
Paresh Rathod
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 19 April 2011
Hi Paresh Rathod,
Assuming Garage is a part of that land which Company A has bought.
In this case Company A will get Profit / Loss in its business as It is Real Estate Business & Land is is treated as Stock. If Profit on sale then after all deduction the Balance Profit will be Taxed @ rate of 30% & if it is loss it can be carry forward for next year.
Then In case of B ( Individual) will het Short term Capital Loss it can be Set off with any other Capital gain & balance loss can be carried forword for next year.
For Company C if Company has bought for resale then it will be shown as stock & if it is bought for some other purpose then it has to shown as Fixed Assets.
Thanks
R Shriram
Paresh Rathod
(CA)
(222 Points)
Replied 19 April 2011
I agree with you Shriram but both company is intercorporate company & consideration is less than its sold to individual.
CAclubindia
