As per the para 5.11 of Guidance Note issued by ICAI on Tax Audit u/s 44AB
The turnover or gross receipts in respect of transactions in shares,
securities and derivatives may be determined in the following manner.
(a) Speculative transaction: A speculative transaction means a
transaction in which a contract for the purchase or sale of any
commodity, including stocks and shares, is periodically or
ultimately settled otherwise than by the actual delivery or transfer
of the commodity or scrips. Thus, in a speculative transaction, the
contract for sale or purchase which is entered into is not
completed by giving or receiving delivery so as to result in the sale
as per value of contract note. The contract is settled otherwise and
squared up by paying out the difference which may be positive or
negative. As such, in such transaction the difference amount is
'turnover'. In the case of an assessee doing speculative
transactions there can be both positive and negative differences
arising by settlement of various such contracts during the year.
Each transaction resulting into whether a positive or negative
difference is an independent transaction. Further, amount paid on
account of negative difference paid is not related to the amount
received on account of positive difference. In such transactions
though the contract notes are issued for full value of the purchased
or sold asset the entries in the books of account are made only for
the differences. Accordingly, the aggregate of both positive and
negative differences is to be considered as the turnover of such
transactions for determining the liability to audit vide section 44AB.
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