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TMI Blog2019 (5) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... isposal vide this consolidated order. 2. For the sake of convenience, I am taking up factual matrix from ITA No.1418/PUN/2018 in the case of Mr. Ramesh Sarjerao Dere. Briefly stated, the facts of the case are that the assessee along with other co-owners, some of which are part of this batch of appeals, have some ancestral agricultural land. Such ancestral agricultural land was converted into stock in trade on 01-04-2012. The assessee and the other co-owners got valuation of this ancestral agricultural land done from a Registered valuer, who determined the fair market value of the land as on 01-04-2012 at Rs. 24,24,00,000/-. Accordingly, the assessee's share in this valuation at Rs. 2,89,85,044/- was credited to his capital account. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue are mutatis mutandis similar. 4. I have heard both the sides and gone through the relevant material on record. All the assessees in these appeals along with some other relatives are co-owners of ancestral agricultural land. The said land, earlier held as capital asset, was converted into stock in trade on 01-04-2012. It is undisputed that the actual transfer took place at a later year. In so far as the assessment year under consideration is concerned, it is only a matter of invocation of section 45(2) of the Income-tax Act, 1961 (hereinafter also called 'the Act') for the determination of the FMV of the property as on the date of conversion. The taxable event would arise only on the actual transfer of the property, which event too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction for other costs incurred after such conversion. Thus, it is clear that if a particular asset is converted into stock in trade in year 1 and such stock in trade is sold in year 2, it is in the year 2 that the capital gain and business income would be computed and included in the income of the assessee. 5. It has been noticed above that in so far as capital gain is concerned, it is computed by considering the fair market value as the full value of consideration of the asset converted into stock in trade as on the date of conversion. The issue which, therefore, instantly arises is the determination of "fair market value" of the asset as on the date of the conversion. Whereas the assessees adopted the FMV of the asset at Rs. 24.24 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y as on 01-04-2012, after entertaining objections, if any, from the assesses and then proceeding accordingly. 6. Another issue is raised in two appeals, namely, ITA No.1418/PUN/2018 in the case of Mr. Ramesh Sarjerao Dere and ITA No.1415/PUN/2018 in the case of Ms. Chandrakala Vilas Dere. 7. Shri Ramesh S. Dere, the assessee in ITA No.1418/PUN/2018 credited a sum of Rs. 20.00 lakh to his capital account which was deposited in the bank account. On being called upon to furnish the source of investment, the assessee stated that family settlement took place and the said amount of Rs. 20.00 lakh was given by the other family members out of sale proceeds of certain shops and also other sources of income. 8. Mrs. Chandrakala Vilas Dere, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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