Issue of charging capital gain

the builder can sell the same direct from its fixed assets, and get benefit of LTCG for assets more than 36 months old 

However if he want to take the same in stock in trade, it would not invite any CG as there is no physical transfer, but he may loose the LTCG benefit on sale.

As per sec 45(2), conversion of capital asset into stock-in-trade of a business carried on by the taxpayer is treated as transfer u/s 2(47) in the year of conversion. The notional capital gain arising from transfer by way of conversion is taxable in the year in which the stock-in-trade is sold. For computing the CG in such cases, FMV on the date of conversion shall be deemed to be the full value of consideration received/accruing as a result of transfer of the capital asset.