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“conversion of capital asset into stock”

Capital GainsSection 45(2)Section 45(2)43 judgments

The decision most relied on for conversion of capital asset into stock is CIT v. Bai Shirinbai K. Kooka (46 ITR 86), cited in 13 judgments on BharatTax.

Leading authorities on conversion of capital asset into stock

CIT v. Bai Shirinbai K. Kooka
46 ITR 86 · 1962 · Supreme Court
13
citing judgments

When a capital asset is converted into stock-in-trade, the taxable profit is determined by deducting the market value of the asset at the date of conversion from the sale proceeds, not its original cost.

Jehangir T. Nagree v. ACIT
23 SOT 512 · 2008 · ITAT
11
citing judgments

An assessee has the sole discretion to determine when they convert a capital asset into stock-in-trade, which is relevant for the applicability of Section 45(2) of the Income Tax Act. The conversion itself is sufficient to trigger Section 45(2).

Judgments citing conversion of capital asset into stock

Orient Craft Ltd., New Delhi vs. DCIT Central Circle -II, Gurgaon

ITA 3311/DEL/2019[2014-15]Status: DisposedITAT Delhi24 Sept 2021AY 2014-15

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Ms. Pramita M. Biswas, CIT-D.R
Section 153ASection 28Section 45(2)

construction and development of the said project. It is the taxability of capital gain and business income arising from the conversion of capital asset into stock in trade and transfer of completed real estate units. According to AO such 9 I.T.As. No.3311 & 5038/DEL/2019 income should be taxed in this very ... terms of section 45(2) arose in this year and therefore according to him, there was long term capital gain on conversion of capital asset into stock in trade, which was brought to tax by Ld. AO in the year under appeal. 13. Associated with this issue was the addition

Addl. CIT, Special Range- 4, New Delhi vs. Global Health Pvt. Ltd., New Delhi

The appeal of the department is dismissed and the appeal of the assessee is allowed

ITA 4871/DEL/2017[2011-12]Status: DisposedITAT Delhi30 Jun 2021AY 2011-12

Bench: The Completion

Section 45(2)

submitted that execution of Joint Development Agreement cannot be treated as adventure in nature of business. It was further argued that the conversion of capital asset to stock was the prerogative of the assessee and it was not open for the Ld. CIT (A) to make a notional conversion

Global Health Pvt. Ltd., New Delhi vs. DCIT, Circle- 10(1), New Delhi

The appeal of the department is dismissed and the appeal of the assessee is allowed

ITA 4237/DEL/2017[2011-12]Status: DisposedITAT Delhi30 Jun 2021AY 2011-12

Bench: The Completion

Section 45(2)

submitted that execution of Joint Development Agreement cannot be treated as adventure in nature of business. It was further argued that the conversion of capital asset to stock was the prerogative of the assessee and it was not open for the Ld. CIT (A) to make a notional conversion