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2019 (5) TMI 1554 - AT - Income TaxLong term v/s short term capital gains/loss - period of holding of land as capital (asset) is less/more than 36 months - the land which was sold converted in capital assets from 06th April 2012 and earlier the land was held as stock in trade - Whether book entries made in the books of account of the assessee showing the impugned land as stock in trade would be relevant ? - HELD THAT:- The assessee rightly contended that findings of the A.O. is incorrect because the capital asset was acquired way back in F.Y. 2006-2007 which is accepted by the A.O, as such, on date of sale period of holding would be beyond 36 months. Therefore, benefit of indexation should be allowed as the asset was acquired way back in F.Y. 2006-2007. Considering the facts and circumstances of the case, it is clear that impugned land remain as capital asset because of the peculiar facts and circumstances of the case noted above as per Notification of the Ministry of Defence (supra). Therefore, on account of transfer of the same to AHCL by way of Settlement of the Dispute in the Hon’ble Delhi High Court, the assessee correctly offered the same as long term capital gains/loss as per Law. The Orders of the authorities below thus are not sustainable in law. Assessee, alternatively also submitted that since Ansal obtained an injunction in July, 2009, therefore, the same would also be beyond 36 moths and as such, it would support the explanation of assessee that land in question was capital asset in nature. In that event the book entry made on 06.04.2012 would not be relevant. We agree with the alternate contention of the Assessee that when everything was brought to the notice of the Court and it came to the knowledge of both the parties that no business activity or construction could be carried out in the impugned land and Hon’ble Delhi High Court granted injunction in July, 2009, therefore, from that date it would be very clear that impugned land would not be having character of stock in trade. Therefore, alternative contention of assessee is also accepted. In view of the above facts, we set aside the orders of the authorities below and delete the entire addition. - Decided in favour of assessee.
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