No Long Term Capital Gain Exemption if Asset is Converted to Stock in Trade – ITAT Delhi

Smt. Alka Agarwal Vs. ADIT (ITAT Delhi) –  once the assessee has converted a capital asset into stock-in-trade, the capital gain arising on such transaction of transfer shall be deemed to be the income of the previous year in which transfer took effect. That was the ordinary position where the capital gain would have been liable to tax in the AY 2005-06 itself. Now, the provisions of Section 45(2) make an exception to the generality of provisions of Section 45(1). Where it is a case of conversion of stock -in-trade, the profit arising on transfer by way of conversion shall be chargeable...