Shares kept as stock in trade sold
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
26 September 2013
Dear Experts,
My company bought some shares for trading and treated it as stock in trade. Same shares were pledged to lenders against borrowing. Subsequently, lenders sold the shares on non payment of loan.
Now, how to treat this transaction for tax purpose? Whether I have to first convert these stock into capital asset and then show it as repayment of loan or I can directly show it as sale of stock to lender.
Thanks,
My company bought some shares for trading and treated it as stock in trade. Same shares were pledged to lenders against borrowing. Subsequently, lenders sold the shares on non payment of loan.
Now, how to treat this transaction for tax purpose? Whether I have to first convert these stock into capital asset and then show it as repayment of loan or I can directly show it as sale of stock to lender.
Thanks,
30 September 2013
Kindly don't link the repayment of loan and sale of shares.
There is no need to convert stock in trade into capital asset.
On sale of shares, business loss or income shall arise. The same needs to be included in total business income/loss of the assessee during the year.
Repayment of loan shall have no tax implication.
There is no need to convert stock in trade into capital asset.
On sale of shares, business loss or income shall arise. The same needs to be included in total business income/loss of the assessee during the year.
Repayment of loan shall have no tax implication.
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