Chargeability of capital Gain tax in case converted asset [capital asset converted to stock in trade – section 45(2)] is sold/transferred in parts in different years:
In case converted asset is sold/transferred in parts in different years [which practically happen in plot trading business] capital gain on conversion as computed in year of conversion [Section 45(2)] shall be chargeable to tax proportionately in the ration of the land sold in different years.
Useful References: Ajay Kumar Sah Jagati vs. ITO (1995) 55 ITD 348 (Del.), DCIT vs. Crest Hotels Ltd. (2002) 75 TTJ 771 (Mum.), G.G. Dandekar Machines Works v. JCIT ITA No. 181/Mum/2001, Octavious Steel Co. Ltd. vs. ACIT -78 TTJ 170 (Kol-SB), etc.
Time limit of 6 months for investment u/s 54EC or 2/3 years for investment as required u/s 54/54F against the capital gain on conversion shall run from date of actual sale/transfer of stock-in-trade from time to time. [Mahesh Nemichandra Ganeshwade vs. ITO (2012) 17 ITR 116 (Pune)]