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2020 (2) TMI 1018 - HC - Income TaxShares converted into stock-in-trade - Valuation adopted for conversion of investments to stock-in-trade, opening stock and closing stock - value of the closing stock at the end of the year was required to be valued at the cost to the business at the time of conversion (i.e. the market value at the time of conversion) or cost of acquisition or net realizable value whichever is less? - HELD THAT:-The GROZ-BECKERT SABOO LIMITED [1978 (11) TMI 2 - SUPREME COURT] has held that where an assessee converts his capital assets into stock-in-trade and starts dealing with them, the taxable profit on the sale must be determined by deducting on sale proceeds and the market value at the time of their conversion into stock-in-trade. The aforesaid principle has neither been taken into account by the AO as well as by the CIT (Appeals) and the Tribunal. It is not in dispute before us that the CIT (Appeals) and the Tribunal has not examined the aforesaid aspect of the matter. In view of preceding analysis, the substantial question of law No.1 framed by this Court is answered in favour of the assessee and against the revenue. In the result, the order passed by the Assessing Officer as well as CIT (Appeals) and the Tribunal are hereby set aide and the matter is remitted to the Assessing Officer to decide the matter afresh.
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