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This query is : Resolved

shrikant (Querist)

21 July 2013 An individual was trading shares in fy 10.11. He did not trade in fy 11.12 and fy 12.13. He has insurance agnecy and has earned profit of Rs. 8 lacs in fy 12.13. He did not revalue closing stock i.e. the shares at cost or market value whichever lower as on 31.3.12 but had valued at a price at which he has purchased the shares. His cost price as on 31.3.12 was Rs. 10 lacs. The closing stock value (Market value) as on 31.3.13 is 4 lacs. Can he claim set off of loss ( difference in opening and closing stock of shares) Rs. 6 lacs against the profit from insurance agency and show taxable income as 2 lacs. Whether 44 AD for loss on shares business is applicable?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

21 July 2013 Section 44AD is not applicable in both the cases.
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Neither such loss can be shown U/s 44AD nor
Insurance Commission receipts can be shown.
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You need not to do such an exercise as the shares have been kept as an investment and until these are sold -you can not book loss.
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The suggested way is to show reasonable expenses against the commission income.
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