How to prepare P&L if assessee is claiming loss from F&O?
This query is : Resolved
07 December 2019
The assessee is having all the 5 heads of Income. Main source is Salary and House Rent. During the year 2018-19, he incurred loss in Futures & Options trading around Rs.37 Lakh.
Now, we know that in case of F&O transactions, it shall be assessed under the head PGBP and hence, we need to report this loss in the P&L A/c. But, as he doesn't maintain accounts regularly, at the time of filing ITR-3, he just filled up the Part-B of Balance Sheet and P&L (i.e., No Account Case).
Department has sent intimation U/s 139(9) by saying that as the loss is claimed under PGBP, Part-A of Balance Sheet and P&L has to be filled up.
Now, the question is - if we try to prepare the P&L A/c, What shall be the Turnover?
We know that, to determine whether the assessee is falling U/s 44AB, in case of F&O trading, the turnover is to be calculated by adding all the profits and losses in absolute figure. But, this should not be the turnover which shall come into P&L, right?
If we report the actual sale value and purchase value, definitely it will cross few crores easily. In that case, again department will say that Tax Audit needs to be done u/s 44AB!
What is the solution? Hope I am clear to present the matter.
Thanks.
Now, we know that in case of F&O transactions, it shall be assessed under the head PGBP and hence, we need to report this loss in the P&L A/c. But, as he doesn't maintain accounts regularly, at the time of filing ITR-3, he just filled up the Part-B of Balance Sheet and P&L (i.e., No Account Case).
Department has sent intimation U/s 139(9) by saying that as the loss is claimed under PGBP, Part-A of Balance Sheet and P&L has to be filled up.
Now, the question is - if we try to prepare the P&L A/c, What shall be the Turnover?
We know that, to determine whether the assessee is falling U/s 44AB, in case of F&O trading, the turnover is to be calculated by adding all the profits and losses in absolute figure. But, this should not be the turnover which shall come into P&L, right?
If we report the actual sale value and purchase value, definitely it will cross few crores easily. In that case, again department will say that Tax Audit needs to be done u/s 44AB!
What is the solution? Hope I am clear to present the matter.
Thanks.
04 June 2020
https://taxguru.in/income-tax/income-tax-future-options-fo-trading.html
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