TaxTMI 
TaxTMI 
2015 (2) TMI 197
X X X X Extracts X X X X
X X X X Extracts X X X X
....al): 2. The Revenue has taken the following grounds of appeal: "1(a) "On the basis of facts and circumstances of the case and in law, the ld.CIT(A) has erred in admitting additional evidences submitted by the assessee during the appellate proceedings". 1(b) "The ld.CIT(A), based on the entries made in the books of accounts, which were for the first time produced only before the CIT(A), erred in arriving at the conclusion that conversion of capital asset to stock in trade was made on 01.04.2001, ignoring the fact that the return of income for A.Y.02-03 filed by the assessee on 12.06.2002 showed the property as capital asset and not as stock in trade." 1(c) "The CIT(A) erred in ignoring the fact that the filing of revised return of income....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing a factory building as its capital asset and was claiming depreciation upon it. The assessee converted the said capital asset to stock in trade on 01.04.01 and offered capital gain of Rs. 2,14,36,356/-. The assessee gave the said property for development to the developer on 18.06.04. The Assessing Officer (hereinafter referred to as the AO), however, observed that the assessee had filed the original return of income for the assessment year 2002-03 on 12.06.02 and had not shown the capital asset as stock in trade. Subsequently, the assessee filed revised return for assessment year 2002-03 dated 30.09.03. The AO observed that the due date for filing of revised return was before 31.03.04 or before the return is processed under section 143(1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rket value of the land as on 27.07.2000 and gave the indexation benefit from the said date. Aggrieved by the order of the AO, the assessee filed appeal before the Ld. CIT(A). 4. Before the Ld. CIT(A), the assessee furnished certain additional evidences. The said evidences were forwarded by the Ld. CIT(A) to AO for his comments. The AO vide his report objected to the admission of additional evidences. However, he reiterated his views as were given in the assessment order. The Ld. CIT(A), after taking into consideration the comments of the AO as well as the submission of the assessee, observed that the AO had not specifically asked the assessee to furnish the proof of conversion of the property from capital asset to stock in trade on 01.04.0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad disputed the books of accounts produced before him during the course of assessment proceedings. He observed from the evidences that the assessee had not only passed book entries but had actually worked on the land with an intent to make profit by way of development of the land. The assessee had received the BMC approval for demarking the plot on 06.04.2000, engagement of architect was made on 23.08.2000, approval of the chief engineer for developing the land and subsequent other formalities showed that the land was converted into stock in trade on 01.04.01 for which the assessee had paid the taxes as per provisions of section 45(2) of the Act while making the redevelopment agreement on 18.06.04. The Ld. CIT(A) also held that the revised ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar 1973, hence the assessee could be held to be owner of the property since 01.04.81. He therefore held that the assessee was entitled to opt for the fair market value of the property as on 01.04.81. He therefore held that the date of conversion from capital asset to stock in trade be taken as 01.04.01 and further that the provisions of section 50C were not applicable and further that the assessee is entitled to adopt the fair market value as on 01.04.81 as cost of acquisition for the purpose of computing the capital gains. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us. 6. A perusal of the above reproduced grounds of appeal reveals that the Revenue has agitated firstly the admission of additional evidence and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act to the assessee's case. The Ld. CIT(A) has also discussed that the Hon'ble High Court has decreed the plaint holding the assessee to be owner on the basis of agreement of the year 1973. We do not find any infirmity in the order of the Ld. CIT(A) on the above issues and the same is accordingly upheld. CO No.23/M/2010: 7. So far the cross objections of the assessee are concerned, the assessee has agitated that it had wrongly offered tax on capital gains on the conversion of capital asset to stock in trade in the year under consideration by wrongly applying the provisions of section 45(2) of the Act pleading that the stock in trade was not transferred during the year under consideration and as such no tax was payable for the year under ....