Capital gain would only be charged in the year in which stock-in-trade would be sold

Brief of the case:

These are the appeals filed by revenue against which assessee also filed cross-objection relevant to three AYs. In these cases ITAT examined various issues and held that capital gain on transfer of land held as stock-in-trade can be made only in the year in which stock-in-trade was sold and not in year in which agreement was made. In an another issue in another AY ITAT remitted the matter to AO to examine the cost of land where assessee determine the cost by relying upon the report of registered valuer and AO used fair market value as cost price of the land to compute capital gain. In an another issue ITAT also held that AO cannot make any addition u/s 14 A read with rule 8D without recording any satisfaction.

Facts of the case:

• Assessee has entered into a project development agreement with M/s Arif Industries Ltd. to develop company’s group housing-cum-shopping project on the company’s land.

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