 |
|
| REAL ESTATE |
|
|
|
|
|
Repeal of Urban Land Ceiling Act
Companies like Godrej, the Birlas and the Wadhwan group, that were apprehensive about their land holdings being taken over by the government, are sitting on virtual goldmines after the repeal of the Urban Land Ceiling and Regulation Act, reports
Shiv Kumar
The Maharashtra government’s decision to repeal the Urban Land Ceiling and Regulation Act (ULCRA) in order to obtain funds under the Jawaharlal Nehru Urban Renewal Mission has spelt a bonanza for some of the oldest companies in the city.
This will mean that a number of companies like Godrej, the Birlas and the Wadhwan group who were apprehensive about their land holdings being taken over by the government can now develop mega townships across the city. The Godrej family and several of their group companies own some of the largest tracts of land in the suburb of Vikhroli measuring more than 3,500 acres. However, government officials say, a lot of the land is covered by mangroves and comes under the Coastal Regulation Zone restrictions and cannot be developed. However, the total value of the land held by the Godrejs is approximately Rs 53,000 crore. A total of about 6,000 acres are owned by just four companies, the Godrejs, the Birlas, the Wadias and the Wadhwans. The Birlas own the land via the Century Textiles companies while the Wadhwans’ land holdings is via Housing Development and Infrastructure Ltd (HDIL), a company listed in the exchanges. The Bombay Dyeing company, owned by the Wadias, has already begun efforts to develop the property. Bombay Dyeing has 50 acres at Prabhadevi in Central Mumbai and 100 acres in Thane on the outskirts of Mumbai. The value of the property has been estimated at Rs 3,900 crore. Maharashtra government officials state that not all the land will be available for immediate development. “Many of the plots have been encroached upon or are locked in legal disputes. But all these cases will be resolved in the next three to five years and there will be a construction boom,” said an official in the urban development ministry. The builders feel that the repeal of ULCRA will allow them to begin the development process more easily. “Earlier, we had to take no objection certificates from the government on excess land,” says a senior officer at HDIL. This requirement is likely to be expedited, say sources. A similar story is being repeated across Maharashtra. Thousands of hectares of land has been freed in towns like Nagpur, Pune and Aurangabad, say officials. In all more than 100,000 acres of land is likely to be freed for development across Maharashtra. Not surprisingly companies which own huge chunks of land in urban areas are seeing a big jump in their valuations. Godrej Industries, a company listed in the BSE, has seen its shares hit the roof even though the land is owned by Godrej & Boyce, a holding company. Adi Godrej, chairman of the Godrej group, has also indicated that benefits from the land held by the group would flow to Godrej Properties, a group company. Godrej Properties is expected to hit the markets with an IPO in order to mobilise funds for the project. Meanwhile, the Maharashtra government has set up a think tank to formulate policies on how to allow development of land freed under the ULCRA. The think-tank will consult elected representatives and civic bodies across the state to look into details like development control (DC) rules, transfer of developmental rights (TDR), build-operate-transfer (BOT) policy, solid waste management methods, encroachments, land acquisition, etc.
|
||
|
GREEN HOUSE
Agaves are succulents that serve as an excellent choice for adding variety to your garden, says
Satish Narula
There is a certain forest or desert flora that has directly entered our houses. Its potential as excellent landscape plants has been well understood and they have been used at multiple locations.
For those looking for qualities like hardy nature, long life, spectacular display and excellent flowering, there is nothing that can beat agaves, the favourite desert succulents. Agaves are normally thought to last for a hundred years, give blooms and then die; the myth that has given this class of plants a name the ‘Century Plants’. The fact that the plant dies after giving blooms, however, is true in some of the species but most of them that have been introduced for landscaping are quick to bloom, within five to eight years or so. And when they bloom, the ambience created is heavenly. After the flowering is over the ‘young ones’ appear on the flowering ‘platform’, fall to the ground and sprout on their own to give independent plants. The propagation in the agaves is thus automatic and the plant keeps on multiplying on its own. They also multiply by way of seeds or suckers. The agaves are valued for their ground beauty. Some of the species grow to giant proportions but they remain very close to the ground due to the lack of stem. The leaves grow in a rosette form and seem to be emerging from the ground. They are stiff, leathery and fibrous. The leaf edges in most of the species are equipped with serration (thorns) with a pungent thorn at the terminal. There are many variations in leaves. Some of these are very artistic whereas others are You may also find light bluish tinge in some species. The flowering comes on a long stock emerging from the middle of the rosette. The height of the stem in most of the cases is amazing. The flowers stay for several days, may be for a month or even more. Agaves are available in many proportions ranging from a foot or so to giant dimensions. The leaf length may vary from a few centimetres to one and a half meter or more. They can be grown in pots and also in large gardens as specimen plants or in groups. When these are grown in groups many of the species should be grown together as it will keep one or the other species around in good size besides maintaining a display of varied shapes and colours. Agaves give a very uniform and healthy growth if they are given proper irrigation. But in case of stress conditions too the plants live well and presentable as ornamental plants. In no case do they tolerate wet feet. Proper drainage should therefore be ensured at all times to enjoy the glory of agaves. The writer is a senior horticulturist with Punjab Agricultural University at Chandigarh and can be contacted at
satishnarula@yahoo.co.in
|
|||
|
Bangalore has massive appetite for hotel rooms: Study
Demand for hotel rooms would continue to outstrip supply in 21 major cities of Asia Pacific Region, with Bangalore topping the list, followed by Delhi and Mumbai, says an industry study.
As per American Express 2008 Asia Pacific Corporate Hotel Rate Projections and Market Forecast released on Tuesday, Bangalore is projected to have a 225 per cent increase in the demand for hotel rooms during 2006-08, while it was found to be 44 per cent in Delhi and 30 per cent in Mumbai. According to the study, in Bangalore occupancy rates were stable at around 70 per cent. Despite poor city infrastructure, the supply would increase dramatically. In Delhi, occupancy was high and stable, averaging at 80 per cent and there was significant new construction to reduce undersupply and access has been improved by low-cost carrier networks. Normal occupancy for Mumbai was 75-80 per cent. New supply near commercial centres and major initiatives to develop city into international metropolis were pushing the increase in demand. The study also found that the increase in demand of hotel rooms would force up the “corporate negotiated rates” in all the major cities in the Asia Pacific region. “Travel Managers and Procurement professionals will continue to face many challenges when managing hotel expenses. However, there are steps companies can take to enhance their negotiating position,” said Prashant Aggarwal, head of American Express Consulting, Japan, Asia Pacific and Australia. Apart from rate projections, the analysis also indicated emergence of several new trends that would impact corporate houses’ ability to manage their hotel spend. Firstly, new generation of travellers, willing to spend more on better facilities, were stimulating the supply of newer types of rooms and styles of hotels. Traveller demands were increasing and these include the full spectrum of modern technologies and lifestyle options from wireless Internet access to health services. This has introduced a wider range of innovative accommodation styles including cabin style, express style, boutique guest houses and serviced apartments. Customers are increasingly considering a supplier’s corporate social responsibility (CSR) practices and hotels are responding positively to this, the study found.
— PTI
|
|||
|
TAX tips
Q. My wife was allotted a 10 marla plot by HUDA in Panchkula, Haryana, in 1978. Since then she has paid all installments, enhancements and non-construction fees till date. Recently, HUDA administrator issued a notice to construct a house on this plot failing which the plot would be resumed. Therefore, in order to avoid resumption we started construction work on the plot and it will be completed very shortly. Thereafter we will have completion certificate from HUDA, Panchkula. My questions regarding taxes are following:
1. My wife wants to sell this new Panchkula house and this will generate a substantial gain. I’m told that the plot will be treated as a long term capital gain (because it was allotted in 1978) and the short term gain on the constructed house will be assessed separately as per the date of its sale. Please confirm whether this is correct or not. 2. My wife wants to construct another house in HUDA Ambala City. The plot there will be gifted to my wife by her sister on a duly executed gift deed to be registered with the registrar Haryana. The gift deed execution will cost us about Rs 2 lakhs, this expense of registration of gift deed will be borne by my wife. Is this a legitimate charge on the LTCG? My wife will complete the house construction within the stipulated period of three years. 3· I already have one house in Ambala City in my name that was constructed 26 years ago. Is my wife allowed to construct another house or there are any legal bindings? 4. If the entire LTCG amount does not get invested on the house to be constructed in Ambala City and some LTCG is left un-invested then the remaining LTCG balance will be deposited in the bonds (NHAI/REC). By the time Ambala house is constructed (it will take approximately three years), the six-month window to purchase bonds to avoid taxes will lapse, so what should I do in this situation? — G.S Bhatia, USA A. The reply to your queries is as under: (i) Your understanding with regard to the leviability of short term capital gains arising on the transfer of residential house is correct. I would suggest that it would be in your interest to mention the sale price of land and that of building separately in the sale deed to be executed for the sale of the house. This will enable you to tender the capital gain on the basis of the sale price specified in the deed. (ii) The registration charges paid by your wife towards the gift deed would become a part of the investment towards the construction of the residential house. As per the facts in the query, you intend investing the long term capital gain earned on the sale of plot of land in the construction of a new house. Therefore in view of the provisions of Section 54F of the Act, you are required to deposit the amount of net consideration on the transfer of plot in a separate bank account under capital gains scheme before the due date of filing the return of income for the assessment year relevant to the previous year in which transfer took place if such net consideration has not been utilised towards purchase or acquisition of the residential house before such date. Such account can be operated for using the amount for the construction of the house. (iii) The fact that you have a house in your own name should not make any difference with regard to the grant of exemption from the exigibility of capital gains tax on the sale of the Panchkula plot which was owned by your wife. As indicated above, in case long term capital gain arises on the sale of a capital asset other than a residential house, the investment in the new residential house has to be made of the net consideration (full value of sale consideration minus expenditure incurred wholly and exclusively in connection with the sale). The investment in capital gains tax saving bonds would also have to be out of the net consideration so as to save the exigibility of the long term capital gains tax. (iv) The investment in long term capital gains tax saving bonds if not made within six months of the date of transfer of capital asset, the facility in respect thereof cannot be availed. You will have to therefore take a decision with regard to the investment in capital gains tax saving bonds within a period of six months from the date of transfer of the Panchkula plot.
Reinvestment of capital gains Q. Referring to a query on LTCG in The Tribune (dated December 29), I believe, indexed capital value of the property in May, 2007 can be withdrawn by the seller and utilised for whatever purpose he intends to. It is only the LTCG which needs to be reinvested in purchase of plot/construction of a new house within three years. — Vinod Kumar Pabreja A. In case the exemption is claimed from the exigibility of the capital gain tax under Section 54F of the Act i.e. where a capital asset not being a residential house has been sold, the said Section of the Act requires that the cost of the newly acquired house should not be less than the net consideration received from the transfer of the old capital asset. Since it is the net consideration which is required to be invested for seeking exemption from the chargeability of capital gains tax, the question of withdrawing/ using the indexed value of the property would not arise.
Sale of property in joint names Q. We three brothers had purchased a residential house in 1992, the sale deed in our favour did not specify the individual shares of the brothers. Now, we intend to sell the said house as the market price is very favourable. Each one of us would be constructing or acquiring a house separately out of the money received on the sale of the existing house. will there be a problem in getting exemption from the capital gains tax by individual co-owners? — Ashok Kumar A. Since the shares of the co-owners have not been specified, the capital gain arising on the sale of the residential house can be assessed in the status of association of persons. If this course is adopted by the department, exemption to individual co-owners would not be allowable. This aspect is supported by an old decision of the Supreme Court in the case of CIT vs. Indira Balakrishna (1960) (39 ITR 546) (SC). It will be in the interest of the individual co-owners to get a decree of the court specifying the shares of each co-owner before such sale so that the benefit of the exemption available under Section 54 can be claimed by each of the co-owners.
Exemption under Section 54 Q. I have sold a residential house for a sum of Rs 45 lakh and have surrendered the possession of the house in August 2007 on power of attorney basis. The house was constructed in 1985. Immediately after the sale on power of attorney basis I purchased another house in October 2007 on power of attorney basis and took possession of it. In both the cases agreement of sale and a power of attorney have been registered. Please let me know whether I can claim exemption under Section 54 of the Act. — R.Singh, Jalandhar A. The definition of the transfer as contained in Section 2(47) of the Act provides vide sub clause (v), that the transfer in relation to a capital asset includes any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act 1882. In the case referred by you there is a transfer of residential house in August 2007 within the meaning of Section 2(47) read with Section 53A of the Transfer of Property Act 1882. Similarly the purchase of a residential house in October 2007 would also be covered within the aforesaid Section. In my opinion therefore the long term capital gain arising on the transfer of the residential house in August 2007 would qualify for exemption under Section 54 of the Act.
What capital asset means Q. Let me know what is meant by the term “capital asset” for the purposes of computing the capital gains? — Amrit Pal Singh, Faridkot A. According to Section 2(14) of the Income-tax Act 1961 (the Act), the term capital asset means property of any kind held by the assessee whether or not connected with his business or profession. However, the following assets are excluded from the definition of the capital asset: 1. Any stock-in-trade, consumable stores or raw material held for the purposes of business or profession. 2. Personal effects of the assessee, that is to say, movable property, including wearing apparel and furniture, held for his personal use or for the use of any member of his family dependent upon him (jewellery is treated as a capital asset, even though it is meant for personal use of the assessee). 3. Agricultural land in India provided it is not situated (a) in any area within the territorial jurisdiction of a municipality or a cantonment board, having a population of 10,000 or more; or (b) in any notified area. 4. Six-and-a-half per cent Gold Bonds, 1977 or seven per cent Gold Bonds, 1980 or National Defence Gold Bonds, 1980 issued by the Central government. 5. Special Bearer Bonds, 1991. 6. Gold Deposit Bonds issued under Gold Deposit Scheme, 1999.
The writer can be contacted at sc@scvasudeva.com
|
|||
|
News Snippets Mumbai: Taj Hotels will open a new 180-room Taj Exotica Luxury Resort and Spa, at Ras Al Khaimah, 40 km north of Dubai, in year 2011. “We plan to create and develop Ras Al Khaimah as a niche business centre and tourist destination,” said Raymond N. Brickson, MD, CEO, Indian Hotels Company, which owns and operates 78 Taj hotels. The hotel, sandwiched between the Arabian Peninsula and the Hajjar mountains, will be only managed by Taj Hotels and is a part of a $ 2 billion luxury resort, developed by UAE-based Suraya Islands Holdings company in the 1.4 million sq metre four-island Suraya islands. Taj plans to tap tourists from North America, Europe and the emerging markets of Russia, India and the far east who can foot the $ 800-900 night bill. — UNI DLF signs MoU with Gayatri Projects New Delhi: DLF Ltd, India’s largest real estate developer, has announced a joint venture with infrastructure firm Gayatri Projects to develop roads, highways and bridges across the country. “This is a JV between DLF and Gayatri with each having a 50 per cent stake,” DLF Group Executive Director Rajeev Talwar said. “With the joint venture, we hope to do projects worth Rs 5,000-10,000 crore in the next few years,” he said. — PTI L&T SCPL launches project in Chennai Chennai: L&T South City Projects Ltd (L&T SCPL) has launched its integrated township project ‘Eden Park’ at Siruseri near here. The township, spread over 100 acres, will be developed in four to five phases at an estimated cost of Rs 1,200 crore. In the first phase, the company will build 656 apartments in over 14 acres within a time span of two-and-a-half years, K. Venkatesh, executive vice-president, development projects Business, L&T told reporters. The first phase would comprise 14-storeyed eight blocks with two and three bedroom 'Villapartments', he said. The township would have residential apartments, villas, schools, essential services, healthcare facilities and shopping mall. L&T is also planning township projects in Coimbatore, Bangalore, Chennai and Vishakapatnam, he said. — PTI
|
|||
|
