A LAND WAS CONVERTED INTO STOCK IN TRADE. IT WAS THEN DIVIDED INTO 10 PCS.CAPITAL GAIN ON THIS LAND IS 200000. IF TILL 31.3.13, ONLY 2 PCS WERE SOLD,WILL THE TOTAL CAPITAL GAIN BECOME LIABLE TO BE PAID..... OR CAPITAL GAIN WILL ACCRUE IN PARTS....I.E. AS AND WHEN THE PLOTS ARE SOLD...
KINDLY THROW SOME LIGHT ON THIS.....THANX IN ADVANCE....
Capital Gain will arise in Pcs.. as and when that piece is sold.
ARE U SURE...???
yup.. sure
Hi
In a case where the land is converted into stock in trade, capit al gains arises not at the time of conversion but at the time when the asset is sold.
There is a Chennai ITAT judgement in the case of R.Gopinath wherein it was clearly held as mentioned above.
Are there any more such judgements either of the ITAT or high courts etc.,
In case there are any can you please post the same.
thanks
badhreenath R
CAclubindia
