"Conversion of stock-in-trade into capital asset is a prevalent business practice, like conversion of shares held as stock-in-trade to investments. However, the tax laws did not provide a mechanism to tax the income arising from such conversion or the basis for determining the value of the resulting capital asset, which had led to considerable dispute and litigation."

Vikas Vasal
Partner, Grant Thornton India LLP

This article appeared in The Hindu Business Line on 05th September, 2018.