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2017 (5) TMI 630 - AT - Income TaxDate of reckoning of acquisition of the property for the purpose of computation of capital gains - LTCG or STCG - What would be the period of holding of the asset-whether it would relate back to the date when (personal) capital asset was converted in to business asset a few years back or the date of conversion now from business asset back to capital asset? - Held that:- In the instant case, the appellant has acquired the property in 1988-89 and 1991-92, the property remained in the hands of the assessee company as stock in trade and the property was transferred as investment in the books of accounts during the FY 1994-95 and sold in 1996-97. The Assessing Officer also observed that the assessee was dealing in real estate and all the expenses have been claimed regularly as business expenses and have been allowed too. During the A.Y 1997-98 also the assessee has also paid MMDA plan submission charges of Rs,15300/- and claimed as deduction. The above finding of the AO shows that though the assessee claimed to have converted the asset in to investment in books of accounts, it continued to claim the maintenance expenses as business expenditure. Even otherwise also from the date of conversion of the asset it was held as capital asset in the hands of the assessee for less than 36 months. CIT (A) rightly held the asset as short term capital asset and the gains should be taxed as short term capital gains since the holding period was less than 36 months from the date of conversion of stock in trade in to the capital asset. Accordingly, we uphold the order of the Ld. CIT (A) and dismiss the assessee's appeal.
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