Taxability and taxable amount - Land possession

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....axability and taxable amount - Land possession<br> Query (Issue) Started By: - sm surana Dated:- 11-1-2010 Last Reply Date:- 15-1-2010 Income Tax<br>Got 1 Reply<br>Income Tax<br>Please advise the taxability issues including the year of taxability and taxable amount? Assessee bought a piece of land in F.Y. 09-10 for Rs. 8 lacs and entered into collaboration agreement. The gist of agreement is as fo....

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....llows : - &fnof;&aelig; Date of agreement Sept. 2009 between assessee and developer. &fnof;&aelig; Cost of construction to be born by developer. &fnof;&aelig; Sharing of built up area with proportionate undivided ownership rights in land underneath. Assessee will get one floor and developer will get 2 floors. &fnof;&aelig; Common areas will be used by both the parties. &fnof;&aelig; Developer shal....

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....l pay Rs. 10 lacs as proportionate cost of land for its share to assessee and also for equalising the share of assessee in allocation. &fnof;&aelig; Assessee has handed over the possession of Land in Oct. 2009. &fnof;&aelig; Developer to complete the construction within 12 month otherwise developer shall pay monthly penalty of Rs. 10,000/- to the assessee. &fnof;&aelig; Assessee has irrevocably ap....

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....pointed the developer as lawful attorney in connection with construction. &fnof;&aelig; Developer is free to negotiate with buyer (for its share) for sale. &fnof;&aelig; Developer will issue the receipts under his signature. Reply By Surender Gupta: The Reply: IT is method of account and recognization of revenue policy that would determine the year in which your income shall be taxable. The treat....

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....ment of such land may also be different. Like is it a stock in trade or investment. Accordingly you may computer the income of the assessee either under the head "business or profession" or under the head "capital gains".<br> Discussion Forum - Knowledge Sharing ....