F&o loss - speculative or non speculative

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Mohit (Querist)
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16 December 2013 I have filed ITR-4 for AY 12-13 stating my salary income, bank interest and trading loss from F&O transaction under profits and gains from business or profession other than speculative business. Iam not liable to comply under the provisions of sec 44AA and sec 44AB. Under BS part in ITR no details are filled in No Account Case and under P&L, particulars under no account case are filled i.e. gross receipts, profits expenses and net profit/loss.

Now I have got a letter from IT under sec 139(9) stating certain errors:

1. Assessee has claimed loss under the head “Profits and gains of Business or Profession”; however,
he has not filled Balance Sheet and Profit and Loss Account and has not got the books of account audited.

2. Assessee entering negative amount in gross profit or net profit.

3. Where assessee furnish total of amount deducted in Sl.no.2,3,4 and 5 of Schedule BP should be consistent with Total credits in the P and L Slno.5

Query:
1. Is F&O transaction speculative or non speculative and whether it should be shown in business or profession or capital gains.

2. Am I required to maintain books of accounts. My loss from F&O is 3 lac rs on a gross rceipts of rs 31 lacs.

3. How to rectify the return and what all details are now required to be filed in new xml sheet to make it complete.

Need to resolve this query urgently. Pls help.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 December 2013 yes you are required to maintain books. section 44AA requires maintenance of books if turnover exceed Rs 10 lakhs.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 December 2013 for rectification, kindly take professional help. Don't redo the mistakes.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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17 December 2013 Yes better take help of practicing CA in this regard.

Mohit

Mohit (Querist)
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18 December 2013 Can I file a revised ITR-2 and show loss from futures & options under short term capital gain (non speculative) under the current scenario?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 December 2013 i believe you should leave it in business income/loss.

Mohit

Mohit (Querist)
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18 December 2013 But IT Act says that we can show it in capital gains, depending on the nature of activity?

Mohit

Mohit (Querist)
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23 December 2013 Need a solution for this. Pls help.

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