Section 45 of the Income-tax Act, 1961 — Capital gains —  In case the capital asset is converted into stock in trade, then provisions of Section 45(2) will come into play and the capital gains arising from such conversion on the date of conversion has to be brought to tax when the transfer/sale of such asset took place, thus by merely converting capital asset into stock-in-trade, the liability to capital gains on the date of conversion shall definitely arise but the same gets postponed and is to be paid in the assessment year when such asset is sold/transferred and any excess/shortfall beyond the full value of consideration adopted for purposes of computation of capital gains on the date of conversion is to be brought to tax as business income(loss) of the year when such asset is sold/transferred — Union Company (Motors) (P.) Ltd. vs. Asstt. CIT 2020] 180 ITD 799 (CHENNAI)