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In
the instant case, the properties, which were hitherto being held as
stock-in-trade by the HUF, were allotted to the assessee on its
partition. The HUF was in the business of real estate which was
continued by assessee after the partition and hence these properties
remained stock-in-trade
even after partition.
The tribunal held that the properties
were stock-in-trade of real estate business when HUF owned it and
remained stock-in-trade when assessee became its owner on partition. In
these circumstances, there was no conversion of capital assets to
stock-in-trade either by the assessee or the joint family. Therefore,
the provision of section 45(2) of the Act is not applicable in the
instant case. As Sec 49(1) doesn't apply to stock-in-trade, cost of
acquisition of these properties to assessee is taken at FMV and not the
cost to their pervious owner-HUF - C. RAMAIAH REDDY v. DCIT [2012] 21 taxmann.com 516 (Bangalore - Trib.) |