Dear Friends,
I have a questions,
1. Can production of milk be treated as agricultural activity?
2. If a company brought large no. of cows, hw to treate the same, as asset or stock?
3. If the cows give birth to a child, how to treat the same, since there is no cost involved?
Please share the answers if anybody know....
Thanks in advance.
Shahad
U can not treat purchase of large number of cows as Capital asset.the reason behind this is except land every capital asset should be depreciated based on life of the asset,u can not absolutely define the life of each cow.a cow may live for ten years and other cow may die tomarrow and indeed Live stock is exempted under definition of capital asset under section 2(47) and even u have a provision in IT act that sale of live stock is business income and not a capital gain.so in ur case purchase of cows come under category of stock and you should increase number of cows in ur live stock.so no case of cost of acquisition for newly born babies of cow and entire sale proceeds of sale of new born cows should be treated as business income
CAclubindia
