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2016 (2) TMI 732 - AT - Income TaxSale of land - nature of transaction - capital gain u/s.45(2) read with 2(47)(iv) or business income - whether land shown as investment was converted into stock-in-trade? - Held that:- In the present case since the property has been transferred in the relevant assessment year, the capital gain which arose in the year of its conversion i.e assessment year 2004-05 becomes taxable in the relevant asst year 2007-08. Further as per sec 45(2) the full value of consideration for computing capital gain will be the fair market value of the said land in the year of conversion i.e. Assessment year 2004-05 as held by the special Bench of Kolkata in the case of Octavis Steel [2002 (5) TMI 204 - ITAT CALCUTTA ] and Mumbai ‘D’ Bench in the case of Ramesh Abaji Walwavalkar [2013 (4) TMI 480 - ITAT, MUMBAI]. We find no infirmity in the order of Ld.CIT-A and he rightly followed the principle laid down by the Special Bench of Kolkata in directing the AO to compute capital gain in pursuance of the u/s 45(2) read with section 2(47)(iv) and to delete the addition made by the AO by treating the same as business income. - Decided against revenue
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