Conversion into stock in trade

This query is : Resolved

abhijeet m. deshpande (Querist)
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12 March 2012 X PURCHASED AGRICULTURAL LAND SITUATED WITHIN THE LIMITS OF A SPECIFIED MUNICIPALITY IN 1994-95. THE SAID LAND WAS CONVERTED INTO NON AGRI. LAND IN 2000-01 WITH THE PURPOSE OF SETTING UP A PETROL PUMP ON THE SAID LAND. HOWEVER THE PLAN WAS CANCELED. THE N.A. PLOT WAS THEN DIVIDED INTO PLOTS IN 2010-11 AND ALL THE PLOTS WERE SOLD OFF IN 2011-12.

MY QUESTION :- WHEN IS THE CAPITAL ASSET SAID TO HAVE BEEN CONVERTED INTO STOCK IN TRADE IN 2000-01 (AT THE TIME OF N.A) OR IN 2010-11 ( AT THE TIME OF PLOTTING AND LAYOUT). PLEASE HELP.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 March 2012 THE LAND HAS BEEN CONVERTED FOR NON AGRICULTURE PURPOSE IN 2000-01.
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ITS CHARACTER HAD CHANGED FROM AGRICULTURE LAND TO NON AGRICULTURE LAND.
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AT THAT POINT OF TIME , THE CAPITAL ASSET WAS SUPPOSED TO BE USED FOR SETTING UP OF A
PETROL PUMP, AND WAS NEVER INTENDED TO BE SOLD IN THE FORM OF PLOTS. WE CAN SAY THAT
CAPITAL ASSET REMAINED AS SUCH. THE ONLY CHANGE WAS ..THE LAND HAD BECOME NON-AGRICULTURE.
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ON THE BASIS OF ABOVE DISCUSSION, IT CAN BE SAID THAT THE "CONVERSION" INTO STOCK IN TRADE HAS TOOK PLACE IN 2010-11 I.E. AT THE TIME OF PLOTTING.