Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 1251 - AT - Income TaxDetermination of the head of income - profits arising from the transfer of lands as per the development agreements and sale of flats/bungalows allotted by the developer in lieu of or as consideration for transfer of land - intention behind the entire transaction on the part of the assessee - HELD THAT:- In the present case, there was not only conversion by the assessee company of land held as capital asset till the date of development agreement into stock in trade, but there was also a change in the form of capital asset in as much as in lieu 73% of the land area, what the assessee company got on conversion was 27% of the total built up area of the project. The remaining 27% of the land area continued to be held by the assessee company, but as stock in trade on conversion. Thus, as a result of development agreement, there was conversion of capital asset into stock in trade as well as change in the form of asset in the sense that in place of 100% land area held as capital asset, the assessee company got 27% of the total built up area of the project alongwith proportionate undivided share in land as stock in trade, which became available to it for the purposes of dealing during the post development agreement period. We direct the AO to compute the income of the assessee form transfer of land held by the assessee company as capital asset by way of development agreement and subsequent sale of flats and bungalows received as consideration for such transfer which took the character of stock in trade on conversion in the manner and as per the method specified above, relying on the provisions of S.45(2). Change in the method of accounting followed by the assessee to recognize the income - Following our decision rendered in the case of M/s. Hill County Properties Ltd [2015 (5) TMI 930 - ITAT HYDERABAD] we direct the AO to adopt the date of registration of agreement or possession of units as the date of sale of units for the purpose of computing the income of the assessee as per the provisions of section 45(2) of the Act.
|