https://www.taxtmi.com/caselaws?id=273177 Surplus arising on conversion of Government securities into fresh Government loan stock was treated as assessable income, not capital gain, because the securities formed part of the bank's ordinary banking business. The surrounding transactions showed that the securities were bought, sold and reinvested in the normal course of business, so the conversion was an exchange of one investment for another rather than passive appreciation of capital. The court applied the principle that a gain is taxable where it arises from a transaction connected with the business and undertaken in its ordinary course. A compulsory conversion did not prevent the old holding from being treated as realised for tax purposes. en-us Wed, 22 Aug 1962 00:00:00 +0530 Sat, 09 Jun 2018 12:16:40 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=273177 Surplus arising on conversion of Government securities into fresh Government loan stock was treated as assessable income, not capital gain, because the securities formed part of the bank's ordinary banking business. The surrounding transactions showed that the securities were bought, sold and reinvested in the normal course of business, so the conversion was an exchange of one investment for another rather than passive appreciation of capital. The court applied the principle that a gain is taxable where it arises from a transaction connected with the business and undertaken in its ordinary course. A compulsory conversion did not prevent the old holding from being treated as realised for tax purposes. Case-Laws Income Tax Wed, 22 Aug 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=273177