treatment of trading of shares in the assessment of company

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Rohit Mishra (Querist)

18 December 2007 the company is having the main source of income by its ordinary business which is mentioned in its MOA/AOA and having also trading income of shares in its books of accounts.
What will be the tax treatment of income from shares in the computation of income ?
Whether it is treated as income from normal business income or speculation business income?

Manish Agarwal

Manish Agarwal (Expert)

18 December 2007 As per Explanation to Sec.73 loss arising on trading in shares by a company shall be deemed to be a speculation loss.However the said section does not talks about profit. But since the loss is deemed as speculation loss the profit thereof shall also be considered to be speculative in nature.

CA. Vineet Grover

CA. Vineet Grover (Expert)

18 December 2007 Hi Rohit,

The income / loss from trading in shares & securities shall be taxed under the head Capital Gains. In trading, delivery of securities is a must. In speculation business there is no delivery of goods. The same has been abolished in business of shares and securities.

Rgds/
Vineet

Rohit Mishra

Rohit Mishra (Querist)

20 December 2007 Thank for the openion for referencing Sec. 73 to Mr.Manish Agarwal

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