limit of turnover under tax audit for speculation business

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anant (Querist)

26 November 2008 wanna know what is the limit of turn over of speculation business in tax audit?
just had look in one of the tax audit book which says turnover include sale of shares & securities. for the purpose of 44AB the difference of between the sales & purchase of shares if it exceeds 40 lacs then it is under in tax audit. but even it is also has one exceptional case in mumbai high court.
so what is exact limit & how it is to be consider?

Harsh Parikh

Harsh Parikh (Expert)

26 November 2008 Dear Anant,

Tax audit u/s 44AB for Sale and Purchase of Shares is applicable when either of the Sales or Purchase exceeds Rs. 40 Lacs during the year.

Intraday transactions are considered as speculative transactions. But for Intraday and F & O transactions, only the net income is considered as turnover for determination of limit u/s 44 AB.

Regards
CA Harsh Parikh

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anant

anant (Querist)

27 November 2008 but sir,
i read one of the book specially on Tax Audit which has talked on the same issue n says the same opinion as u have given sir but it has one of the case law against that rule from mumbai high court. that book is not firmly specifies that rule it just expresses view of the ICAI.
then what to follw since there is no specific rule on it?