Biraj (Proprietor) (103 Points)
21 December 2012Dear All,
I have construction business, constructed building of 4 floor, want to trasfer 2nd floor to my fixed assets.
pl inform me at which amount it should be transfer
at FMV or at Cost ?
and profit realised is to be paid in which year?
CA. Biraj Kotecha
PRATHIMA REDDY
(CA )
(115 Points)
Replied 21 December 2012
Sir,
Conversion of stock in to asset is also considered as sale. Profit is to be realised in the year in which the stock is transferred.
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 21 December 2012
when a capital asset is converted into stock in trade capital gains arises, which is taxable in the year in which such asset is sold,but this is not the case if its vice versa i.e. conversion of stock in trade into Fixed asset.,it should be transfered at cost & if profit is realised on subsiqueint sale than it should be taxable as short/long term capital gains in the year of sale
CAclubindia
