Transfer

a director who is also a member of 1/3 rd shares in a private company transferred his jewelry held by him as a capital asset to the company. now the company is in jewelry business and further sells the jewelry to customers. now the directors argues that this transfer is to be shown as a loan to the company, is it possible or it should be liable to capital gain.
Replies (2)
the jewelry was transferred initially when the company wasn't into jewelry business. now Co is into jewelry business so there wud be capital gains arising on part of the co on account of conversion of capital asset into stock in trade. it wud be taxable in the year when th the stock is actually sold. so the question if loan does not arise

dear sir the company was in the business of jewelry from day 1.

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