Category: Income-tax
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Are the sums offered by the builder for redevelopment of our co-op hsg society taxable?
No. If no ‘cost of acquisition’ is attributable to the development rights, the gains arising on their transfer are not assessable in either the hands of the society or in the hands of the members.
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If I deal in shares, will my gains on shares held for investment purposes become business profits?
No! One has to be careful to ensure that there is a proper segregation of the shares held on investment account from the shares held on trading account. The investment shares must be valued at cost while the trading shares can be valued at market price if that is lower.
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If we introduce stock-in-trade as capital contribution into a firm, are we taxable?
Yes! As per the judgement of the majority in the Special Bench in DLF Universal vs. JCIT, stock-in-trade gets converted into a capital asset at the point of introduction into the firm and attracts s. 45(3).
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One of our factories is shut for more than 2 years with no operations. Can we still claim depreciation?
Yes! You are entitled to claim depreciation even on assets that are not used provided they are part of a “block of assets” and the block has been used during the year. The user of the “block” is important and not that of individual assets.