44 ad

This query is : Resolved

shrikant (Querist)
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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)
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21 July 2013 Section 44AD is not applicable in both the cases.
.
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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