Capital Gain

[CHETAN CHOTALIYA]

Respected sir, We are a partnership firm, we have some questions, so please clarify and help us

1- We had purchased factory land Date:- 07/08/2001.

2- We have built a factory building on this land on date:- 29/06/2003.

3- Land And Building Both A/c. are separately in books of account.

4- We have claimed depreciation on the building.

5- Revanyu Advocate will make the deed whole of the building.

6- We don't invest 54 to 54GA.

Now, we are selling the factory, Can the cost of construction be merged into the cost of land? or, Can that be shown in the improvement cost?
Please, Give the guidance for saving the Capital Gain Tax?.
Thanking You.

AI Summary

Capital gain treatment: whether building construction cost can be merged into land cost or treated as improvement to reduce tax. A partnership firm is selling a factory where land (acquired earlier) and a separately recorded building (constructed later) have been used; depreciation was claimed on the building and no reinvestment exemptions will be availed. The firm asks whether the building's construction cost can be merged into the land's cost for capital gains purposes or shown as improvement cost, and requests guidance on reducing capital gains tax.