Q. Property Valuation for sale of Property after Company Acquisition

Question

A company was formed in Noida in 1995, and it Purchased a property worth Rs. 10 lacs and Share Capital was also Rs. 10 lacs.

In FY 20-21, other set of person has purchased all shares of this company from existing shareholders for Rs. 5 Cr,  As the market valuation of the property was Rs. 5 Cr.

In Noida, they have also paid stamp duty on Shares as well as to Noida Authority also for the property.

Now the new Company, wants to sell the property for Rs. 5 Cr.

Query : For Capital Gain what price will be taken of the property, either 10 lacs, or Rs. 5 Cr as cost of acquisition

Answer 1

As the company wants to sell, then cost 10 lacs or 2001 valuation, whichever is high can be taken.