LAND - STOCK IN TRADE - JDA POSSESSION GIVEN - SHARE OF SALES / BUILT-UP AREA

[Pritesh Jain]

Following are facts

1. LAND - BUSINESS ASSET (STOCK-IN-TRADE) 01.04.13
2. JDA ENTERED & POSSESSION GIVEN - 30.06.13
3. ACTUAL SALE OF FLATS (BUILT-UP AREA + UNDIVIDED SHARE IN LAND) - 2015-16

Queires:-

Business Income would be computed upon:
1. Does entering JDA, giving possession and all rights to builder result in accrual / reciept of Income under the IT, act
2. Or actual sale of Built-up area recieved / share of sales as agreed in JDA

Whether Accounting standard will be applicable or General law under Transfer of property act  - (Sec.53 A) will apply

[satyanveshi]

sec. 53A of Transfer of Property Act is made applicable only to the definition of "transfer" in relation to capital asset in sec. 2(47). Once the asset is stock in trade, then this provision is not applicable. In my personal opinion, even if super structure is received, the income arising out of the transfer of the part of the land need not be offered. Only when it is sold then it will be treated as stock in trade is sold and accordingly, the income is to be offered.