TaxTMI 
TaxTMI 
2016 (3) TMI 742
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....of land. 2. Shri R.Vijayaraghavan, ld. Counsel for the assessee submitted that the assessee-company has converted the land which was considered as capital asset into stock-in-trade in the year 2000. According to the ld. Counsel, the real estate division of the assessee- company was demerged by an order of the High Court with effect from 28.2.2007. The assessee-company entered into a Memorandum of Association with M/s Globus Realtors Pvt. Ltd. offering 5.075 acres of land as security for the amounts advanced by M/s Globus Realtors Pvt. Ltd. to M/s Essorpe Holdings Pvt. Ltd, a sister concern of the assessee-company. The assessee has also executed a power of attorney in favour of Shri V. Sivakumar, the Managing Director of M/s Globus Realtors....
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....rade. However, after conversion of property into stock- in-trade, it has to be assessed bas business income. Referring to pages 9 & 10 more particularly para 9 of the order of this Tribunal in I.T.A.No. 2256/Mds/2012 dated 11.7.2013, the ld. Counsel submitted that this Tribunal directed the Assessing Officer to compute the business income in respect of the stock-in-trade of the property after considering the provisions of sec. 45(2) of the Act. According to the ld. Counsel, in view of this observation of this Tribunal, the property was capital asset till the assessment year 2007-08 and from assessment year 2007-08, the property was converted into stock-in- trade. According to the ld. Counsel, the assessee has not received any consideration ....
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....o consideration the provisions of sec. 45(2) of the Act in the earlier round of litigation. The CIT(A) after referring to the order of this Tribunal dated 11.7.2013, found that the issue of taxability regarding gain on transfer of capital asset was decided by this Tribunal therefore, the CIT(A) found no merit in the claim of the assessee. 4. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee-company was demerged by an order dated 15.9.2009. Before demerger, the assessee-company gave the landed property to sister concern as security for the loans advanced by M/s Globus Realtors Pvt. Ltd. The security was given to M/s Globus Realtors Pvt. Ltd for commercial expe....
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....on (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as, stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset]". In view of the above provision, the capital gains on transfer of 5.075 acres of land as stock-in-trade has to be assessed as capital gains in the hands of the assessee. 6. No....