TMI Blog2015 (11) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... would arise and require consideration. The impugned order on facts has found the land was originally a capital asset which has later been converted into stock-in-trade. Thus, section 45(2) of the Act is applicable. However, the capital gains on conversion of capital assets into stock-in- trade is payable only in the year in which the assessee ultimately sells such stock-in-trade yet for purpose of computing capital gains the date of conversion would have to be determined. This exercise has to be carried out by the Assessing Officer after considering the evidence to be led before it. Thus, no fault can be found with the above direction of the Tribunal as it is a consequence of the finding of fact arrived at by the Tribunal that the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether, on the facts and in the circumstances of the case and in law, the Tribunal is correct in accepting the plea of the assessee for invoking of section 45(2) of the Act in relation to the computation of income arising from the conversion/treatment of land into stock-in- trade of its construction business and profits thereon ? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal is correct in setting aside the case to the file of the Assessing Officer to decide the year of conversion or treatment of land into stock-in-trade in spite of the fact that the assessee-company is involved in construction business and the land under construction was purchased for construction business only ? 3. Whether, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t time the same to be brought to tax although payable when the stock-in-trade was sold. The Commissioner of Income-tax (Appeals) did not accept the above submission of the assessee and upheld the order dated March 23, 2006, of the Assessing Officer. 5. On further appeal, the Tribunal by the impugned order on the basis of the facts found that during the course of assessment proceedings before the lower authorities evidence was brought on record which indicated that the respondent-assessee was incorporated in 1970. Its main object was to carry on its business of running a hotel and for which purpose land in question was acquired as a capital asset. It was only later that the land in question was utilised as part of its stock-in-trade for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, it is the submission on behalf of the Revenue that section 45(2) of the Act is inapplicable as the assessee is in the business of construction. Consequently, it is also submitted that there was no occasion for the Tribunal to restore the issue to the Assessing Officer to determine the relevant assessment year in which the capital asset was converted into stock-in-trade. 8. We find that the impugned order of the Tribunal has on facts found that the respondent-assessee was incorporated in the year 1970 with the main object of establishment of its hotel. There was evidence before the lower authorities in the form of letter dated August 21, 1971, from the Government of India, Department of Tourism granting approval to its proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidence to be led before it. Thus, no fault can be found with the above direction of the Tribunal as it is a consequence of the finding of fact arrived at by the Tribunal that the land in question was originally held as capital asset and was later converted into stock-in-trade. 10. In view of the above, so far as questions Nos. 1 and 2 are concerned the view of the Tribunal is a possible and reasonable view on the basis of the appreciation of facts. Thus, no substantial question of law arises for our consideration. Therefore, we see no reason to entertain questions Nos. 1 and 2. Appeal dismissed as regards questions Nos. 1 and 2. Re : Question No. 3 11. As a result of survey proceedings, the Assessing Officer sought to bring ..... X X X X Extracts X X X X X X X X Extracts X X X X
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