Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 589 - AT - Income TaxDetermination of the short term capital gains - AO adopting the cost of the previous owners being partnership firm - FMV determination - conversion of the said land into stock-in-trade - AO did not accept the contention of the assessee company and had taken the cost of acquisition of the said land being stock-in-trade at the cost as recorded in the books of the firm as on the date of revaluation, and the difference between cost as per the books of the firm being the previous owners, and the sale price received by the assessee, was treated as short term capital gains - CIT-A deleted the addition - Held that:- computation for assessment year 2010-11 wherein the capital gains has been determined at Nil, has not been dislodged by the Revenue and that position continues to remain. As long as this position continues, the cost of acquisition in the hands of the assessee company for the purpose of computing the profits or gains on the sale of the said converted stock-in-trade being land during the years only same are sold cannot be disturbed. Obviously what has been sold by the assessee is stock-in-trade and its business is the sale of the land represented as stock-in-trade. Obviously, the business income would be the difference between the sale consideration received by the assessee on the transfer of the said stock-in-trade being the land and the cost as disclosed by the assessee in respect of the said land for assessment year 2010-11 being the year in which the conversion was done and the capital gains disclosed. If at all the A.O wanted to adopt the cost of the asset as recorded in the books of the previous owner, he could have done so when computing the capital gains for the assessment year 2010-11 when the asset was converted from investment to stock-in-trade. The A.O having missed the bus for assessment year 2010-11 cannot make the said adjustment during the impugned assessment years. Perusal of the order of the CIT(Appeals) clearly shows that the Ld.CIT(A) has taken this issue into consideration when deciding the appeal. - Decided against revenue
|