A Chartered Accountant showing her 5 yrs baby, the movie of Cindrella. After All movie is over, the 5 year child asked her father
" PAPA..!!! When the Pumpkin turned into Gold....
Whether we treat that gold as Capital gain or Income from other Sources??"
Friends....What will we do??? How should we treat the gold???
i think its income from other source. ( not sure)
How yaar???
Justify ur answer.....
After all U r in CA course..U have to make in depth analasys..:-)
If the same is done as a continous activity, it is to be treated as Business Income. Raw material (Pumkin) is converted into Final Product (Gold). However, if it is a one time activity, we can treat it as IFOS. It cannot be taxed as CG, coz, the gold sold was not purchased by him. It is just a gold that has been converted from pumkin. So, it is to be taxed as Business Income
Thanks for ur response...Mr.Narayanan
CAclubindia
