“conversion of capital asset into stock”

Capital GainsSection 45(2)Section 45(2)43 judgments

The decision most relied on for conversion of capital asset into stock is CIT v. Bai Shirinbai K. Kooka (46 ITR 86), cited in 13 judgments on BharatTax.

Leading authorities on conversion of capital asset into stock

CIT v. Bai Shirinbai K. Kooka

46 ITR 86 · 1962 · Supreme Court

citing judgments

When a capital asset is converted into stock-in-trade, the taxable profit is determined by deducting the market value of the asset at the date of conversion from the sale proceeds, not its original cost.

Jehangir T. Nagree v. ACIT

23 SOT 512 · 2008 · ITAT

citing judgments

An assessee has the sole discretion to determine when they convert a capital asset into stock-in-trade, which is relevant for the applicability of Section 45(2) of the Income Tax Act. The conversion itself is sufficient to trigger Section 45(2).

Judgments citing conversion of capital asset into stock

ITO 23(1)(6), Mumbai vs. Holiday Resort Corporation, Mumbai

In the result, Cross Objections under consideration filed by the Assessee are allowed and the appeals filed by the Revenue are dismissed being infructuous

ITA 2198/MUM/2023[2009-10]Status: DisposedITAT Mumbai30 Jan 2024AY 2009-10

Bench: Shri.Narender Kumar Choudhry () & Shri S Rifaur Rahman ()

For Appellant: Shri. Piyush Chajjed

Section 148Section 151Section 151(1)Section 250

sold to the vendors, the revenue is recognised in the year of sale and the corresponding capital gains on the conversion of capital asset into stock in trade is also held to be chargeable to tax in the year of sale. From the perusal of return of income filed

Shri Babubhai Naranbhai Sakhiya, Rajkot-Gujarat vs. The Pr. Commr. of Income Tax-1, Rajkot-Gujarat

In the result, the appeal filed by the Assessee is dismissed

ITA 144/RJT/2016[2011-12]Status: DisposedITAT Rajkot15 Dec 2023AY 2011-12

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143(3)Section 263Section 45(3)Section 54B

alleging that the Assessing Officer (AO) has not verified the Short Term Capital Gain of Rs.39,37,435/- arising on conversion of capital asset into stock in trade and deduction claimed u/s. 54B of the Act though all the requisite details were furnished at the time of assessment proceedings

Guruvendra Singh, Kota vs. Assistant Commissioner of Income Tax Circle-1, Kota

In the result, appeal of the assessee is allowed

ITA 144/JPR/2023[2016-17]Status: DisposedITAT Jaipur07 Dec 2023AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Rohan Sogani (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT) a

Section 142(1)Section 143(2)Section 143(3)Section 548Section 54B

ITAT, Jaipur and Ahmedabad Bench. 4.9.i Mahendra Rajnikant Zaveri, ITA No. 1117/JP/2016 Relevant Factual Position • Benefit claimed under Section 54F • Conversion of Capital Asset into Stock in Trade Held by Hon’ble ITAT “7. Admittedly, the sale consideration received beyond the date of transfer of the asset in such ... 4.9.ii The Spunpipe and Construction Co. [Baroda] Pvt. Ltd. ITA. Nos. 2932/AHD/2011 and 2482/AHD/2012 Relevant Factual Position • Benefit claimed under Section 54G • Conversion of Capital Asset into Stock in Trade Held by Hon’ble ITAT “….1 5 . A perusal of the aforementioned Section shows that capital assets should be machinery

Anil Shankar Palewar, Nagpur vs. Income Tax Officer, Ward-5(1), Nagpur

In the result, appeal of the assessee is allowed

ITA 36/NAG/2022[2015-16]Status: DisposedITAT Nagpur31 Oct 2023AY 2015-16

Bench: Shri Satbeer Singh Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita No.36/Nag/2022 िनधा"रण वष" / Assessment Year : 2015-16 Anil Shankar Palewar, The Income Tax Officer, Plot No.219, Suyog Nagar, V Ward-5(1), Nagpur. Nagpur – 440015. S Pan: Abzpp 8221 A Appellant / Assessee Respondent / Revenue Assessee By Shri Kapil Hirani – Ar Revenue By Smt. Rashmi Mathur – Sr.Dr Date Of Hearing 26/10/2023 Date Of Pronouncement 31/10/2023 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Is Filed Against The Order Of Ld. Commissioner Of Income Tax[Nfac], Delhi Dated 26.12.2021Under Section 250 Of The Act, 1961 For The Assessment Year 2015-16. The Assessee Has Raised Following Grounds Of Appeal : “1) On The Facts & Circumstances Of The Case & In Law, The Ld. Ao Grossly Erred In Disallowing & The Ld. Cit(A) Nfac, Delhi Grossly Erred In Confirming The Denial Of Benefit Of Exemption Under Section 54Ec Of The Income Tax Act, 1961 As Claimed By The Appellant In His Return Of Income. The Exemption Under Section 54Ec Anil Shankar Palewar [A]

Section 250Section 54ESection 54F

।आयकरअपीलीय अिधकरण "ायपीठ नागपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH : : NAGPUR [VIRTUAL HEARING AT PUNE] BEFORE SHRI

Smt. Lilaben Babubhai Sakhiya, Rajkot-Gujarat vs. The Pr. Commr. of Income Tax-1, Rajkot-Gujarat

In the result, the appeal of the assessee is dismissed

ITA 157/RJT/2016[2011-12]Status: DisposedITAT Rajkot19 Apr 2023AY 2011-12

Bench: Ms. Annapurna Gupta (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

For Appellant: NoneFor Respondent: Shri Shramdeep Sinha, CIT-D.R

Section 263Section 45(3)Section 54B

alleging that the Assessing Officer (AO) has not verified the Short Term Capital Gain of Rs.80,54,870/- arising on conversion of capital asset into stock in trade and deduction claimed u/s. 54B of the Act though all the requisite details were furnished at the time of assessment proceedings

Girdharbhai Haribhai Gajera, Surat vs. ITO(International Taxation), Surat

In the result, additional grounds raised by the assessee is allowed

ITA 143/SRT/2019[2015-16]Status: DisposedITAT Surat22 Feb 2023AY 2015-16

Bench: Shri Pawan Singh, Jm &Dr. A.L.Saini, Am आयकर अपील सं./Ita No.143/Srt/2019 (िनधा"रणवष" / Assessment Year: (2015-16) (Physical Court Hearing) Girdharbhai Haribhai Gajera Income Tax Officer 1,Vrushal Nagar, Opp. (International Taxation), 107, 1St Vs. Ktargam Police Station, Floor, Anavil Business Centre, Katargam Road, Surat-35004 Adajan-Hazira Road, Opp. Star Bazar, Adajan, Surat-395009 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abepg 7339 M (Assessee ) (Respondent)

For Appellant: Shri Hiren R.Vepari, C.AFor Respondent: Shri Vinod Kumar, Sr-D.R

Section 142(1)Section 143(2)Section 143(3)Section 2(14)Section 271Section 45(2)

loss claimed by assessee was rightly disallowed by Assessing Officer – Held, yes” Considering the fact discussed hereinabove, AO was correct in rejecting conversion of capital asset into stock in trade as claimed by assessee and taking gain as long term capital gain. With regards to contention of assessee that

Maddimisetti Srinivasu, Tanuku vs. The Asst . Commissioner of Income Tax, Circle-1, Rajahmundary

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 96/VIZ/2022[2017-2018]Status: DisposedITAT Visakhapatnam31 Jan 2023AY 2017-2018

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.96/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2017-18) Maddimsetti Srinivasu Vs. Asst.Commissioner Of D.No.1-77, Peddintlamma Street Income Tax Tanuku Mandal Circle-1 Komaravaram Rajahmundry [Pan : Ctxpm3066Q]

For Appellant: Shri G.V.N.Hari, ARFor Respondent: Shri M.N.Murthy Naik, CIT(DR)

Section 142(1)Section 143(3)Section 263Section 45(2)Section 48Section 54F

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री दुव्वूरु आर एल रेड्डी, न्याधयक सदस्य

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 544/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Nov 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R

Section 131Section 132(4)Section 153CSection 45(2)

provisions of section 45(2) of the Act are applicable in a case of transfer by way of conversion of capital asset into stock in trade. In the instant case there is no such conversion of capital asset into stock in trade. The land at Thanisandra was held as Capital

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 543/BANG/2021[2015-16]Status: DisposedITAT Bangalore07 Nov 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R

Section 131Section 132(4)Section 153CSection 45(2)

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 542/BANG/2021[2014-15]Status: DisposedITAT Bangalore07 Nov 2022AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R

Section 131Section 132(4)Section 153CSection 45(2)

DCIT Circle- 2(1)(1), Mumbai vs. M/S Bombay Dyeing & Manufacturing Co. Ltd, Mumbai

ITA 928/MUM/2020[2009-10]Status: DisposedITAT Mumbai05 Jul 2022AY 2009-10

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R

Section 145Section 14ASection 92CSection 92F

stock in trade is effected without appreciating the fact that the time of chargeability of income tax for capital gain arising from conversion of capital asset to stock in trades should be the point when the stock in trade is sold or otherwise transferred. 14. Whether on the facts

ACIT, Circle - 2(1)(1), Mumbai vs. The Bombay Dyeing & Mfg. Co. Ltd., Mumbai

ITA 3299/MUM/2019[2010-11]Status: DisposedITAT Mumbai05 Jul 2022AY 2010-11

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R

Section 145Section 14ASection 92CSection 92F

ACIT, Circle - 2(1)(1), Mumbai vs. The Bombay Dyeing & Mfg. Co. Ltd., Mumbai

ITA 2779/MUM/2019[2013-14]Status: DisposedITAT Mumbai05 Jul 2022AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R

Section 145Section 14ASection 92CSection 92F

Kay Foam Ltd., Mumbai vs. Pr. CIT -2, Mumbai

The appeal is partly allowed

ITA 598/MUM/2021[2010-11]Status: DisposedITAT Mumbai20 May 2022AY 2010-11

For Appellant: Shri Vipul JoshiFor Respondent: Smt. Neelam Shukla

Section 143Section 143(3)Section 147Section 263

that purpose section 48 of the IT Act, the sales consideration received will be the market value as on the date of conversion of capital asset into stock in trade, which in this case is Rs. 19,90,71,000/- being the market value determined by the Stamp valuation authority

Harkant Maganlal Joshi, Mumbai vs. The ITO - 33(1)(5), Mumbai

In the result, assessee’s appeal for A

ITA 168/MUM/2021[2012-13]Status: DisposedITAT Mumbai19 May 2022AY 2012-13

Bench: Hon'Ble Shri Sanjay Garg

For Appellant: Shri Ashok Bansal, ARFor Respondent: Shri Kanhya Lal Kanak, DR

Section 250Section 45Section 54

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE HON'BLE SHRI SANJAY GARG, JUDICIAL MEMBER ITA No. 168

Harkant Maganlal Joshi, Mumbai vs. The ITO - 33(1)(5), Mumbai

In the result, assessee’s appeal for A

ITA 167/MUM/2021[2013-14]Status: DisposedITAT Mumbai19 May 2022AY 2013-14

Bench: Hon'Ble Shri Sanjay Garg

For Appellant: Shri Ashok Bansal, ARFor Respondent: Shri Kanhya Lal Kanak, DR

Section 250Section 45Section 54

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE HON'BLE SHRI SANJAY GARG, JUDICIAL MEMBER ITA No. 168

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 297/BANG/2020[2008-09]Status: DisposedITAT Bangalore09 Feb 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)

Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 296/BANG/2020[2007-08]Status: DisposedITAT Bangalore09 Feb 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)

Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 295/BANG/2020[2006-07]Status: DisposedITAT Bangalore09 Feb 2022AY 2006-07

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)

Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL

DCIT Central Circle -II, Gurgaon vs. Orient Craft Ltd., New Delhi

ITA 5038/DEL/2019[2014-15]Status: DisposedITAT Delhi24 Sept 2021AY 2014-15

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Ms. Pramita M. Biswas, CIT-D.R

Section 153ASection 28Section 45(2)

construction and development of the said project. It is the taxability of capital gain and business income arising from the conversion of capital asset into stock in trade and transfer of completed real estate units. According to AO such 9 I.T.As. No.3311 & 5038/DEL/2019 income should be taxed in this very ... terms of section 45(2) arose in this year and therefore according to him, there was long term capital gain on conversion of capital asset into stock in trade, which was brought to tax by Ld. AO in the year under appeal. 13. Associated with this issue was the addition