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he assessee had converted the alleged capital asset as stock-in-trade in the year 2012. i.e.09.01.2012 as per Assessing Officer and 29.11.2012 as per the taxpayer she sold the same on 21.05.2014 relevant to the impugned assessment year 2015-16sec.54F deduction claim of Rs. 60,94,982/ AO submitted that residential flat on which exemption u/s.54F has been claimed by the assessee was not constructed after the date of transfer but constructed alongwith saleable flats. For the purpose of claiming deduction u/s. 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.s per amended sub-section(2) of section 45 of the Act, which was inserted by the Taxation Legislation (Amendment Act), 1984 w.e.f. 1.4.1985, notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income tax as his income of the previous year in which such stock in trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. Therefore, in view of above CBDT circular and order of Special Bench of Kolkata Bench of the Tribunal in thecaseof Octavius Steel & Co. Ltd (supra), I have no hesitation to hold that the Assessing Officer was also not correct in denying benefit of section 54F of the Act to the assessee on the ground that residential flat was not constructed after the date of transfer but alongwith saleable flats.” We adopt the foregoing detailed reasoning mutatis mutandis and direct the Assessing Officer to allow assessee’s sec. 54F deduction in issue.

Shanti Prime Publication Pvt. Ltd.

Sec. 54F of Income Tax Act, 1961—Capital Gain— Assessee filed appeal against dismissing the claim u/s 54F of the Act on the ground that residential flat was not constructed after the date of transfer and they were constructed along with saleable flats. The assessee had converted the alleged capital asset as stock-in-trade in the year 2012. i.e.09.01.2012 as per Assessing Officer and 29.11.2012 as per the taxpayer she sold the same on 21.05.2014 relevant to the impugned assessment year 2015-16. The assessee would then re-invest the corresponding capital gains is a yet another independent property. For the purpose of claiming deduction u/s. 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.
Held that the Assessing Officer was not correct in denying benefit of section 54F of the Act to the assessee on the ground that residential flat was not constructed after the date of transfer but along with saleable flats.”
Tribunal adopt the foregoing detailed reasoning mutatis mutandis and direct the Assessing Officer to allow assessee’s sec. 54F deduction in issue. The ground of interest computation, if any, is restored to the Assessing Officer in view of hon’ble jurisdictional high court’s decision in Ajay Prakash Verma vs. ITO. The assessee’s appeal was partly allowed. --- NISHA SARAWGI vs. Asstt. CIT. [2020] 23 ITCD Online 74 (RANCHI)