Section 2(47) of the Income Tax Act provides that any conversion of capital assets into stock-in-trade, shall be regarded as a transfer.
Section 2(47) of the Income Tax Act-Definition of Transfer
U/S 2(47) of the Income-Tax Act 1961, the term ‘transfer’ is defined as the transfer in relation to a capital asset includes;
- The sale, exchange or relinquishment of the asset; or
- The extinguishment of any rights therein; or
- The compulsory acquisition thereof under any law; or
- In a case where the asset is converted by the owner thereof into or is treated by him as stock-in trade of a business carried on by him, such conversion or treatment; or
- Any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; or
- Any transaction (whether by way of becoming a member of, acquiring shares in a co-operative society, company or other association of persons or by way of any agreement of any arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, any immovable property.
- Maturity of redemption of a zero coupon bond.
- For the purposes of sub-clauses (v) and (vi), “immovable property” shall have the same meaning as in clause (d) of section 269UA.
- For the removal of doubts, it is hereby clarified that “transfer” includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterized as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India.
Transactions not regarded as Transfer