audit limit

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SUMIT (Querist)
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20 March 2011 please tell me

when audit liability arises in case of commodity trading by an individual.

Please also quote any notification/circulars
issued in this regard.

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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20 March 2011 As per 44AB if sales or turnover or gross receipt exceeds 60 lakhs audit is compulsory.

SUMIT

SUMIT (Querist)
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22 March 2011 My dear friend Ravi

As I have read section 44AB,there is no reference about commodity market trading included in that section. kindly reconsider on it and if any notification/circular issued in this regard. please specify
Is there any provision regarding profit/loss limit on which audit liability for commodity market trading arises

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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22 March 2011 Please Clarify The nature of Commdity trading activity you r asking about.

SUMIT

SUMIT (Querist)
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23 March 2011 If an individual purchase silver and sell it in same day OR if sell one month after date of purchase of gold in the commodity market

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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23 March 2011 As per Sec 2(3) of the Income tax act business includes any trade, commerce, or manufacturing or any adventure or concerns.
Hence in your situation Tax audit is applicable.
If your Commodity trade is an Speculative(shares and debenture) and you are Dealing in individual capacity(not as a Normal course of business) then Tax audit is not applicable.

SUMIT

SUMIT (Querist)
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24 March 2011 Thanks Ravi

I have another question
Is there any provision regarding profit/loss limit on which audit liability for commodity market trading arises in the same situation of selling or purchasing the silver or gold in commodity market

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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24 March 2011 There is no provision in the Income tax act for For determining tax audit based on Profit/ loss

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