Is it Capital gain or Income from other sources???

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???

Replies (4)

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

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