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2018 (5) TMI 1977 - AT - Income TaxProfit from sale of shares - assessee had shown long term and short term capital gains on sale of shares, which were earlier, held as stock-in-trade - HELD THAT:- Issue is squarely covered by the decision of the Tribunal in assessee’s own case for the A.Y.2004-05 thus we do not find any infirmity in the order of CIT(A) for directing the AO to treat the profit arising out of sale on shares as capital gains. Business income u/s.41(l) - difference between the book value of shares held as stock-in-trade as on 31.03.2002 and the cost thereof at which the same were converted into investments on 1.4.2002 - CIT(A) bringing to tax net the benefit taken by the assessee in earlier years at the time of conversion of stock in trade into investment - HELD THAT:- As on 31/03/2002, assessee had shown stock in shares at market or cost, whichever is lower, thereafter, assessee converted the stock of shares into investment. As and when assessee has treated the shares as stock in trade, the benefit of lower of cost or market price was taken, accordingly, profit of that year was reduced. During the year under consideration when the assessee had sold those shares, the excess over the cost price is liable to be taxed as capital gain / loss. However, the benefit already taken by the assessee by valuing these shares at cost or market whichever is lower in the earlier years when shares were treated as stock in trade is liable to be assessed as business income and CIT(A) had correctly brought the difference to tax net u/s.41(1) of the IT Act. The case law relied on by learned AR is distinguishable on facts, accordingly, we confirm the action of CIT(A).
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