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Sale of Shares held as stock in trade

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(Querist)
23 July 2011 Kindly send advice me on the below:-
I am trading in shares. Last year i purchased a share at 100 and revalued the same at 80 during the end of the year since we value closing stock at cost or NRV whichever is less. Now if i sale it in current year, what will be the cost of the share Rs. 100 or Rs. 80? Plz reply asap
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Prof. Bajaj

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Prof. Bajaj (Expert)
24 July 2011 Dear Vidhi,

This would depend on whether you have used the revaluation to affect your P&L account or to set off against profits in the end of the year.

In case you have taken this effect, then your purchase cost would be Rs. 80.

However, if you are showing Share trading as an investment and not a business, then you can avail of STCG and use the purchase cost as Rs. 100.

Hope this helps.
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CA. Anoop Gadia

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CA. Anoop Gadia (Expert)
05 August 2011 you treating the stock as a stock in trade than the cost would be Rs. 80.
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