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TMI Blog2016 (2) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of capital gain. The assessee claims the profit on sale of the land at Plot 33, VGP Golden Beach Layout, Part 2, Injambakkam, Chennai, as long term capital gain. However, the Assessing Officer treated the same as short term capital gain. It is also to be considered whether the assessee is eligible for indexation of cost or not. According to the Ld. counsel, the land in question was shown as stock-in-trade in the balance sheet. Subsequently, the land in question was converted into investment / capital asset. Thereafter the property was sold. The assessee computing the period of holding from the initial date of acquisition, returned the income on sale of the land as long term capital gain. However, the Assessing Officer has taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al asset. The Assessing Officer found that the property was sold for total consideration of Rs. 1,07,50,000/-. Accordingly, by adopting the market value of the land at Rs. 1,84,20,000/-, the Assessing Officer computed the capital gain at Rs. 1,42,94,840/-. The Ld. D.R. further submitted that the Assessing Officer treated the capital gain as short term capital gain by taking the holding of the land from the date of conversion into capital asset. According to the Ld. D.R., for the purpose of computation, the period of holding, the date on which the asset became capital asset in the hands of the assessee, has to be considered and not the date of original acquisition. According to the Ld. D.R., irrespective of the original acquisition of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2009, the date on which the land was converted into capital asset, then it has to be treated as short term capital gain. 4. We have carefully gone through the decision of Pune Bench of this Tribunal in Kalyani Exports (supra). The Pune Bench, by majority opinion, found that irrespective of the character of the asset at the point of acquisition, be the "capital asset" within the meaning of 2(14) of the Act or not, the cost of acquisition of the asset has to be treated on the date on which the property was actually acquired. The Tribunal has also found that the asset cannot be acquired first as non-capital asset at one point of time and again as capital asset at different point of time. The Tribunal further observed that there can be only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property that is the subject of capital gains levy and not indicative of the character of the property at the time of acquisition. It was clearly held that there cannot be two dates of acquisition of the same asset one as non-capital asset and again as capital asset. The earlier judgments of the Supreme Court in Bai Shirinbai K. Kooka';s case (supra) and Miss. Dhun Dadabhoy Kapadia';s case (supra) were noticed by the Bombay High Court and held to be of no relevance to the question. Towards the end of the judgment, the Bombay High Court observed that a similar view has also been taken by the High Courts of Madras, Karnataka, Kerala and Punjab & Haryana. 20. In my view, the matter having been concluded by the judgment of the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is eligible for deduction under Section 54F of the Act subject to the compliance with the conditions prescribed in Section 54F of the Act. In view of the above, we are unable to uphold the order of the lower authority. Therefore, the orders of the lower authorities are set aside. The Assessing Officer is directed to treat the profit on sale of the land as long term capital gain and examine whether the assessee has complied with the conditions prescribed in Section 54F of the Act. If the assessee has complied with the conditions prescribed in Section 54F of the Act, then the assessee is eligible for deduction under Section 54F of the Act. 6. In the result, the appeal of the assessee is allowed. Order pronounced on 19th February, 2016 at Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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