Of late many people- house wifes,students,retired persons etc,etc, in addition to business people, are buying and selling stocks, shares,futures/options, commodity trade via on line- with minimal requirements- either in terms of infrastructure or finance. The end result may or may not be significant. But the volume of activity may be more. In such an eventuality, do they require to maintain books of account and get their accounts audited u/s 44AB?
j.r.kota
The operative word in the query is buying and selling. Buying and selling of stocks and shares and the things mentioned there in above may be speculative or non speculative. Investement in shares is different from buying and selling of stocks and shares. One may infact say that it is investment only and the resultant profit is only capital gain and not profit from business. But the attendant data in the form of periodicity, frequency, period of holding etc may give an idea that it is not an investment decision but only a business transaction of buying and selling.
It is in the light of such a scenario the query is raised.
Sec 44AB states " that every person carrying on business shall,if his total sales,turnover or gross receipts, as the case may be, in business exceed or excedds.... get his accounts of such previous year audited........."
Similarly Sec 44AA (2) says " every person carrying on business or profession (not being a profession referred to in sub sec (1) shall ...... keep and maintain such ......inaccordance with the provisions of this Act"
No where in the act an exception is made under the above two sections for the maintenance of the books of account and/or getting them audited under Sec 44AB.
I would appreciate the comment with proper reasoning and supported by the provisions of the Act.
My view is both the Sections are applicable. Even in the icome tax return provision is made to sepaately declare the profit derived from depculative business and rules are framed separately for carry forward and set off. Can't this activity come under this category? and if so, are not those sections applicable?
J.R.Kota
CAclubindia
