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G.S. Arora (no) (98 Points)

18 January 2017

If an assesse had purchased & sold shares on the same day,
then whether it will be taxable as speculative business
or
as STCG 111A?

Please quote section no. also

Thanx in advance.

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 18 January 2017

Depends upon the trading pattern. If traded occassionally, the same can be treated as IFOS, otherwise as PGBP.

G.S. Arora (no) (98 Points)
Replied 18 January 2017

Dhirajilal but how a speculative transaction whether one or more can be taxed under other sources.
Is there any circular or section for the same

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 18 January 2017

Their Lordships of Supreme Court in the case of Narain Swadeshi Weaving Mills v/s. Com. of EPT 26 ITR 764/765 has held that the term business can note some real substantial and systematic or organised course of activity or conduct with a set purpose. That whether a particular source of income is business or not must be decided according to our ordinary notion as to what a business is. It is true that there is authority for the proposition that even a single or isolated transaction can in a conceivable case amount to business provided that it bears the characteristics of trade. However in view of the fact that use of plural, speculative transactions in explanation 2 to Section 28 clearly shows that in order to constitute speculation business within terms of that explanation, a single transaction of speculation should not be treated as speculation business

Courtesy: https://www.lexsite.com/services/network/caa/contro1.sH T M L

Ajit Hegde (CA - Final) (1367 Points)
Replied 19 January 2017

As rightly highlighted by Mr. Dhirajlal, it depends upon case to case.

Motive of the transaction is very essential to determine as to whether it is a speculative transaction or not.