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| The Tax Publishers2020 TaxPub(DT) 1795 (Ranchi-Trib) INCOME TAX ACT, 1961
Section 54F
For purpose of claiming deduction under section 54F date of transfer shall be date on which the stock-in-trade is sold or otherwise transferred by the assessee and not on the date of conversion of the capital asset into stock-in-trade because on conversion of capital asset into stock-in-trade, there is no profit as no one can make profit out of himself.
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Capital gains - Deduction under section 54F - Conversion of capital asset into stock-in-trade - Transfer whether completed on date of conversion or on date on which stock-in-trade was sold
Assessee was aggrieved by action of revenue declining deduction claim under section 54F of Rs. 60,94,982. Assessee had converted alleged capital asset as stock-in-trade in year 2012. Revenue's stand was that date of transfer of capital asset was to be taken as on their conversion of stock-in-trade way back in the year of 2012-13 going by section 2(47)(iii). Held: Instant issue is no more res integra since covered by tribunal's co-ordinate bench's in Rajesh Kumar Adukia v. DCIT 2019 TaxPub(DT) 7352 (Ranchi-Trib),30-10-2019, wherein it was held that CBDT Circular No. 791, dated 2-6-2000, clarified that for purpose of claiming deduction under section 54EA/54EB/54EC, the date of transfer shall be the date on which the stock-in-trade is sold or otherwise transferred by the assessee and not on the date of conversion of the capital asset into stock-in-trade. Further, Special Bench of Tribunal in case of Octavius Steel & Co. Ltd. held that on conversion of capital asset into stock-in-trade, there is no profit as no one can make profit out of himself. AO was directed to allow deduction to assessee.
Followed:Rajesh Kumar Adukia v. DCIT 2019 TaxPub(DT) 7352 (Ranchi-Trib),30-10-2019; Octavius Steel & Co. Ltd. v. ACIT 2002 TaxPub(DT) 1385 (Kol-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, RANCHI BENCH
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