Sale proceeds of agricultural land and conversion of land by cutting trees into housing plots, brought asset in as stock-in-trade attracts capital gain being transfer u/s 2(47)(iv) rws 45(2)

Synthite Industrial Ltd.[2017] 86 taxmann.com 138 (Kerala)

Where assessee whose business included real estate development purchased a rubber estate to utilize land for non-agricultural purpose and converted said land by cutting trees into housing plots, thus, brought asset in as stock-in-trade and sold those plots to several people for construction of villas, it was held that though property was once an agricultural land, its acquisition was for non-agricultural purposes, assessee did not carry on any agricultural activity in land and at relevant date, viz. date of sale, land had ceased to be an agricultural land, if that be so, assessee could not have claimed that income gained from sale of land was from sale of agricultural land entitling it to exemption from levy of capital gains

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