Investment company

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Dear CCI Members,

There is a client of us which is an investment company  which deals in purchase and sale of shares of thier own Now my question is previous auditor has computed tax under business income,is he correct in doing that because actually itshould be calulated under capital gain.....Kindly some reply me with supported provisions/case laws

Replies (1)

Dear Prashant , the auditor is right in your client's case. Because if a person is continuously engaged in buying and selling of any capital asset than the capital asset becomes stock in trade for the purpose of taxation and the income is chargeable under the head business and profession not under capital gains.

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