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DLC rate for agriculture land converted into stock in trade

This query is : Resolved 

07 December 2022 Dear sir,
one of our client is having agriculture land which is 10 km away from municipal limit. now the assessee has converted the land into plots. i.e he has converted the capital assets into stock in trade. His first registry is done on 11/12/2021. The profit upto the date of conversion will be taxed as capital gain and thereafter as profit and gains from business. Now my query is what should be the conversion rate should it be DLC rate as on 31/03/2021 of Agriculture land in bigas or DLC rate as per Plots to decide the exempt capital gain.

07 December 2022 DLC rate of the non agricultural land as on date of conversion.

08 December 2022 Sir what it the logic behind it, any case law

08 December 2022 As on the date of conversion to stock in trade the land should be non-agricultural.

08 December 2022 Sir we have not applied for any conversion, just plotting has been done and between them land has been left for road. sir the dlc rates are that of plots and on the same rate plots are been sold

08 December 2022 How can you sell the plots when the town planning has not approved them?

08 December 2022 Sir these are agriculture plots in small village

08 December 2022 When you have converted the bigger land with smaller plots, have you not taken permission from village panchayat?

08 December 2022 Sir no permission is required only the land owner prepares a sit plan and appoints some broker who sells the plot. And latter on these plot owners apply for electricity connection and for water boring is done

08 December 2022 As such you cannot do registration of individual plots. The land as such remains in your name itself. When there is no registry, there is no transfer and as such no capital gain.
Its unauthorized plotting without any proper documentation. The amount received from the purchasers can be treated as deposits.

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