https://www.taxtmi.com/caselaws?id=120153 On conversion of a capital asset into stock-in-trade, section 45(2) requires bifurcation of tax treatment: capital gains accrue up to the date of conversion and business income arises on subsequent sale, so the entire sale consideration cannot be taxed only as business income. For assets acquired before 1-4-1981, fair market value as on that date is relevant for cost computation where applicable. Mere intention or an offer under the Urban Land (Ceiling and Regulation) Act did not effect conversion of agricultural land; the land became stock-in-trade only on final approval for non-agricultural use on 3-2-1992. Expense deductions linked to business income required fresh consideration on remand. en-us Tue, 30 May 2006 00:00:00 +0530 Wed, 01 Aug 2012 00:09:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=120153 On conversion of a capital asset into stock-in-trade, section 45(2) requires bifurcation of tax treatment: capital gains accrue up to the date of conversion and business income arises on subsequent sale, so the entire sale consideration cannot be taxed only as business income. For assets acquired before 1-4-1981, fair market value as on that date is relevant for cost computation where applicable. Mere intention or an offer under the Urban Land (Ceiling and Regulation) Act did not effect conversion of agricultural land; the land became stock-in-trade only on final approval for non-agricultural use on 3-2-1992. Expense deductions linked to business income required fresh consideration on remand. Case-Laws Income Tax Tue, 30 May 2006 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=120153