Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Investment company

Prashanth (Chartered Accountant) (2322 Points)

01 September 2012

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

Reply
Follow
Share

1 Replies

Pawan Mittal (CA Final) (702 Points)
Replied 01 September 2012

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.