Expert advice is solicited in following problem
One of my clients, a manufacturing jeweler held stock of gold value of which is lower than the market value. This is due to steep rise in gold prices in previous years and stock of gold acquired in the course of business which is around 20 years for which stock inventory is well maintained. Now due to old age he wishes to gift his entire stock of gold to his two sons & retire from business.
Now my doubt is….
· Although gifts made to sons are not taxable in the hands of either recipient or donor [Reliance placed upon sectin 56 (vi) & V(vii)] of IT Act in instant case, what are the consequences of gifting gold stock held in manufacturing account?
· Whether assessing officer has right to treat same as deemed sale for the purpose of taxation? If so under what provisions of law?
Advise/ guidance / explantion / discussion will be highly appriciated.
CAclubindia
