§ 45 of the Income Tax Act, 1961 – Capital gains on disposal – (In case of conversion of assets into shares at negotiation) – investment years 2008-09 and 2009-10 – Assessee-Gesellschaft acquired in 2002, a plot of land – On 30-12-2005, it transferred this land to a developer through a development contract – instead of such a transfer, Assessee received 27 per cent of the built-up area in the form of apartments/bunglows, which were then sold to different buyers – the income from the transfer of land by town planning contract and the subsequent sale of housing and bunglows was calculated in accordance with Article 45(2). Given that 27 per cent of the built-up area of the project was received by the appraiser in return for the transfer of 73 per cent of the land area, the construction cost of this 27 per cent could reasonably be considered the fair value of 73 per cent of the land area, in order to calculate the capital gains incurred by the appraiser when transferring land by development contract. This also led to the conversion of capital into shares in trading. That capital gain is taxable in proportion to the sale of commercial assets in the form of housing and bunglows consisting of built-up land and proportional shares of land, whereas sums going beyond the cost of such housing and bunglows are taxable in the hands of Assessee as business income. – Accordingly, the 2/3 year period for investments if there is and/s 54/54F applies from the date of actual sale/transfer of trading stocks from time to time. [Mahesh Nemichandra Ganeshwade vs ITO (2012) 17 ITR 116 (Pune)] A promotion agreement allows the developer (often a developer) to apply for a building permit for the development of the landowner`s land, and then provides that the land will be sold on the open market once the planning has been completed and the profits are shared between the two parties. Occupational safety and health is a very significant risk from the point of view of a landowner, since in some jurisdictions the legislation entails undred delegated obligations for the owner of the country in which the development is being carried out. The development contract should contain a clause where the landowner authorizes the developer to act as the landowner`s representative and to designate the contractor as the « prime contractor » on behalf of the landowner. To enter into a development contract, the developer and the local government work with legal counsel to develop and execute a contract that binds all parties.. .