| Question And Answer | |
|---|---|
| Subject: | commercial property |
| Category: | Income-Tax |
| Querist: | bks |
| Answered by: | Law Intern |
| Tags: | redevelopment |
| Date: | September 29, 2025 |
when a new shop is allotted after redevelopment, is it taxable ? any case law ?
does it make if it was depreciable ?
Yes. U/ 45(5A), there is a transfer on redevelopment and capital gains are chargeable. Exemption u/s 54 will not be available as the reinvestment is in a commercial property. If the old property was depreciable, than the transaction will have to be processed as STCG u/s 50 by reducing the consideration from the block of assets.
The principles of law are well explained in Anil Dattaram Pitale v. ITO (ITAT Mumbai).
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But if there is no block of assets..how to calculate capital gain on receipt of possession of commercial shop on redevelopment?