2007 (5) TMI 106

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....ned property bearing No.9, Raj Narain Road, Civil Lines, Delhi. By an agreement dated 1^st June, 1981, his children joined together to form the AOP with the common object of re-developing the property and to build flats on the plot. 3. The market value of the property was Rs.30 lacs and after getting necessary permission, the AOP proceeded to construct 24 flats. The members of the AOP were credited with their share in the property which was valued at Rs.30 lacs and these amounts were shown in the balance sheet prepared by the AOP for the year ending 31^st March, 1982, (assessment year 1982-83). A return of income was filed by AOP for this assessment year showing the "nil income". 4. In respect of year ending 31^st March, 1988, which i....

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....iled cross-appeals before the Tribunal and vide the impugned order Tribunal partly allowed the appeal of the Assessee and dismissed the appeal filed by the Revenue. 8. The first issue raised by the Revenue in this case is as to whether the Tribunal was right in allowing the interest payable by the Assessee for the period 30th June, 1980 to 31st March, 1988 in the previous year relevant to the assessment year 1988-89. 9. The main objection raised by the Assessing Officer is that the interest claimed represents interest for more than one year and hence cannot be allowed. 10. This objection is not sustainable because it is only when the entire project has been completed then the question of Profit or Loss could be ascertained and this....

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....nto stock in trade, the Assessee is entitled to adopt the market value of the asset as on the date of conversion and this principle has been approved by the Apex Court in Commissioner of Income Tax v. Bai Shirinbai K. Kooka, [1962] 46 ITR 86.  In this case the Assessee who held by way of investment several shares in companies commenced a business in shares converted the shares into stock-in-trade of the business, and subsequently sold these shares at a profit. It was held; (headnote) : "…That the Assessee's assessable profits on the sale of the shares was a difference between the sale price of the shares and the market price of the shares prevailing on the date when the shares were converted into stock-in-trade of the business in ....