The assessee filed the return of income showing the income from business and  capital gains u/s 45(2) of the Income -tax Act . In the course of the assessment proceedings  the petitioner furnished all the relevant details including the nature of the activities undertaken, details of the flats sold and the closing stock. The assessment was completed u/s 143(3) of the Act .  The AO reopened the assessment on the ground that the closing stock should have been valued on the basis of market price , capital gain was valued at taking higher value as  cost of acquisition . Allowing the petition the Court held that  the Capital gains are chargeable to tax when individual flats are sold and not when the land is transferred to the co-operative society formed by the flat purchasers. The flat purchasers, by purchasing the flats, had certainly acquired a right or interest in the proportionate share of the land but its realisation is deferred till formation of the co-operative society by the owners of the flats and eventual transfer of the entire property to the co-operative society.  Accordingly considering  an overall consideration of the entire matter, it is quite evident that there was no basis or justification for respondent  to reopen the assessment . The  reasons rendered could not have led to formation of any belief that income had escaped assessment within the meaning of the aforesaid provision.  Accordingly the reassessment notices were quashed . Relied on Chainrup Sampatram v. CIT( 1953) 24 ITR 481 (SC) for the proposition that it would be a misconception to think that any profit arose out of valuation of the closing stock. (WP No 788 of 2001  dt  12 -06 -2020 ) (AY. 1992-93, 1993-94, 1994-95 ,  1995-96)