The asseee has treated the lands received under family arrangement as stock in trade in the books of account. The AO applied the provision of S.45(2) and assessed as long term capital gains  . CIT (A) affirmed the order of the AO . On appeal the Tribunal held that  the properties were held as stock in trade by the joint family before they were allotted to the assessee on partition and the asssessee continued to carry on real estate business even after partition . Thus there was no conversion of capital assets in to stock in trade either by the assessee or the joint family hence provisions of S. 45(2) of the Act  were not attracted .  On appeal by the revenue the High court affirmed the order of the Tribunal .  Relying on the decision of Supreme Court in Kalooram Govindram ( 1965) 57 ITR 355 (SC)  the court observed that  except in the case of fraud , collusion , inflation , and deflation of value for ulterior purposes  , the cost of the asset to a divided member must  necessarily be its cost to him , at the time of partition whether mentioned in the  partition deed ascertained aliunde .    (ITA No. 318 of 2012 dt .25 -6 -2020) (AY. 2006 -07)