Assessee was an owner of land. It entered into a joint development agreement with two associate companies for development of its land into a multi-storeyed office complex. Out of total constructed area assessee was entitled to certain area of land together with proportionate undivided interest in land and 96 reserved car parks. During year, assessee had converted its undivided interest in land into stock-in-trade. AO held that capital gains arose on conversion of asset into stock-in-trade.  The assessee contended that AO could not brought to tax capital gains in year under consideration merely on conversion of capital asset into stock-in-trade.  It was also explained that in subsequent year assessee sold its share of land and had voluntarily offered to tax income arising form capital gains as per S. 45(2) of the Act. Tribunal held that by merely converting capital asset into stock-in-trade, liability to capital gains on date of conversion would definitely arise but same would got postponed and was to be paid in assessment year when such asset was sold/transferred. Matter was to be restored to AO for  passing de novo assessment. (AY. 2002-03)