TaxTMI 
TaxTMI 
Sir my client executed a sale deed of land of ₹ 50 lacs of which 5 lacs were received in advance and balance ₹ 45 lacs were to be received at the time of sale deed. ₹ 45 lacs cheques (30 & 15) were received but after registry, cheque of ₹ 15 lacs was dishonored. Now my client has filed a suit in court for this & verdict is still awaited. Capital gain to be calculated on total ₹ 50 lacs (total consideration or ₹ 35 Lacs(consideration received). or any other treatment is suggested?
Capital gain in case consideration amount not received partially
23 Jun 2015 
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Capital gains treatment depends on whether consideration was realised or the transfer is treated as nullified pending legal resolution.
Where a sale records a total contractual consideration but part remains unpaid or a cheque is dishonoured and recovery is pending, two positions arise: tax on the full contractual sale consideration irrespective of receipt, or no capital gain if non-realisation leads to nullification of the transfer. The correct treatment hinges on whether the transfer is legally effective despite payment default and the outcome of recovery proceedings. (AI Summary)
Where a sale records a total contractual consideration but part remains unpaid or a cheque is dishonoured and recovery is pending, two positions arise: tax on the full contractual sale consideration irrespective of receipt, or no capital gain if non-realisation leads to nullification of the transfer. The correct treatment hinges on whether the transfer is legally effective despite payment default and the outcome of recovery proceedings. (AI Summary)