20 February 2017
Section 45(2) talks about computation of capital gain in the case of conversion of capital asset into stock in trade. The Section came into effect from AY 1985-86 by way of amendment in Section 45 by Taxation Laws (Amendment) Act, 1984 to nullify the effect of Apex Court Judgement in the case of CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86.
20 February 2017
It is possible to convert capital asset into stock in trade. Capital gains = FMV of asset on date of conversion- Acquisition cost. It is taxed i nthe year in which stock is transferred.
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