classification of Shares held of group companies
This query is : Resolved
CA. Anirban Mukherjee
(Querist)
26 May 2010
a Pvt Ltd. co. which is regd. as an NBFC is classifying its investment in Group companies which are all pvt ltd companies as Stock in trade, is this treatment correct?
this is more so when we know that shares of a Pvt co are not tradeable/transferable
this is more so when we know that shares of a Pvt co are not tradeable/transferable
26 May 2010
Yes, the treatment is correct and followed as a matter of practice by most NBFC and also allowed by RBI.
26 May 2010
IN MY OPINION THIS TREATMENT IS NOT CORRECT AND IT SHOULD BE SHOWN AS INVESTMENT.
SHOWING INVESTMENT IS MUCH BETTER. IF YOU SHOW IT AS STOCK-IN-TRADE THEN ANY INCOME ARISING IN FUTURE WILL BE TREATED AS BUSINESS INCOME.
SHOWING INVESTMENT IS MUCH BETTER. IF YOU SHOW IT AS STOCK-IN-TRADE THEN ANY INCOME ARISING IN FUTURE WILL BE TREATED AS BUSINESS INCOME.
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