Section 12 - Amendment of section 45 - Taxation Laws (Amendment) Act, 1984

12. Amendment of section 45. In section 45 of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted, namely: (2) Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as, stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. .