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TMI Blog2012 (12) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... e land as an investment but to exploit it as business venture. When the assessee has entered into joint development agreement on 25-4-2004, the asset has already been converted into stock in trade and no more remains a capital asset. Therefore, it cannot be treated as a transfer u/s 2(47)(v). Thus no reason to interfere with the finding of the CIT (A) directing the AO to work out the short term capital gains on conversion of land held as investment in stock in trade and also the business income arising from sale of stock in trade separately - against revenue. - ITA No. 465/HYD/2010 - - - Dated:- 20-7-2012 - SHRI D. KARUNAKARA RAO AND SHRI SAKTIJIT DAY, JJ. Appellant by : Shri M.H. Naik Respondent by : Shri A.V. Raghu Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings, the AO found that the assessee had shown business income on two ventures i.e. Dandamudi Enclave and Aspen land. So far as Aspen land is concerned, AO found that the assessee had given the land for development to the builder and received built-up area which was again sold to the builder. However, the assessee had declared income from Aspen land under the income from business and has set off against brought forward business losses. 4. In course of assessment proceedings, he assessee explained that the assessee has converted fixed asset into stock in trade, hence it was offered as business income. The AO did not accept the assessee s claim on the reasoning that when the asset is converted into stock in trade, it has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the CIT (A). On appeal, the CIT (A) after considering the contentions raised by the assessee and on examination of materials available on record, found that that the asessee had shown aspen land as an investment in the balance-sheet and the same has been converted into stock in trade which is evident from audit report and computation of income filed along with return of income during financial year 2004-05 itself. After conversion into stock in trade, the land was given for development by the assessee to the builder under a joint development agreement dated 25-4- 2004 at a sharing ratio of 50:50. The CIT (A) by taking into account the decision of the ITAT, Mumbai Bench in the case of ACIT vs. Jehangir T. Nagree in their order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. It is a fact that the assessee during the financial year 2003-04 had acquired the aspen land through an agreement of sale cum GPA along with two other coowners viz., M/s Shanta Sriram Constructions Pvt. Ltd., and Mr. V. Satyanarayana Reddy having 40% and 20% shares respectively. It is also a fact that the assessee is in the real estate business of buying, holding and developing of land into open residential layouts, commercial and residential complex either on own or through other developers in the interest of business. From elaborate discussions made by the CIT (A) in his order, it is seen that though the land was shown as investment in the balance-sheet at the time of acquisition, the assessee has converted it into stock in trade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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