Dear Friend
Plz tell me what is Speculation Buisness and what is the treatment of income and loss from Speculation business
thankx
Naveen garg
CA Naveen Garg (Chartered Accountant) (75 Points)
04 August 2008Dear Friend
Plz tell me what is Speculation Buisness and what is the treatment of income and loss from Speculation business
thankx
Naveen garg
CA Hemant T Dewani
(Chartered Accountant)
(3356 Points)
Replied 04 August 2008
This issue was subject to controversial interpretation by assessee and income tax department.The issue had come up in case of Babulal Enterprise vs ACIT before Mumbai bench of ITAT [1999-2000] wherein it was held that where the actual delivery was not taken and difference in price was settled on the basis of contract note,the turn over can not include those transactions. Another decision of Mumbai Tribunal expressing similar views was in case of Growmore Exports Ltd vs ACIT [78 ITD 95] . Therefore , if you are involved in Day Trading, i.e you are squaring off of the share deal same day, the contract value is not taken for the purpose of turnover, but the differential shall be taken for the purpose of turnover.
Remember , however since the F & O trades have been declared as business trade and not speculative , the department shall read the law literally.So, in case of Future & option trade , get your accounts audited u/s 44AB of the I T Act.
Therefore, if you are only doing day tarding ,and intra day sale exceeds Rs 40 lac contract note vale of share sale , you will not fall for tax audit u/s 44AB of the I T Act
Vineet Jain
(Partner)
(242 Points)
Replied 04 August 2008
Speculation Business Bole toh........ Business which depends upon the happening or non happening of an event.... or u can say it is based on probability......
Loss in Speculation Business can sett off agnst the income of the same......aur carry fwd ka period yaad nahi hai dost..... but i think its 4 yrs...
I think this will give u a vague idea of it....
Regards ,
Shailender Singh ("§ịŋğĤ ĭś Қïиפ")
Sneha R. Gujrathi
(Chartered Accountant)
(97 Points)
Replied 04 August 2008
When trading i.e. buying or selling of securities is done without actual delivery of the shares & securities it is called as speculation business.
The profits & gains from speculation business should be treated separately. The speculation loss can be adjusted against the speculation profit only and vise versa. Further the speculation loss can be carried forward for set off against the speculation profit only in subsequent 4 assessment years.
CA Nitin Wadhwani
(Chartered Accountant)
(4469 Points)
Replied 04 August 2008
When trading i.e. buying or selling of securities is done without actual delivery of the shares & securities it is called as speculation business.
The profits & gains from speculation business should be treated separately. The speculation loss can be adjusted against the speculation profit only and vise versa. Further the speculation loss can be carried forward for set off against the speculation profit only in subsequent 4 assessment years
Rahul Hatwal
(Artical Assistant)
(22 Points)
Replied 21 June 2009
shubham sharma
(Chartered accountant )
(117 Points)
Replied 13 June 2012
hey i want complete judgement of this case law
Babulal Enterprise V/s ACIT before Mumbai Bench of ITAT
pls help me. my mail id is shubham.an.aspirant @ gmail.com
shubham sharma
(Chartered accountant )
(117 Points)
Replied 13 June 2012
hey i want complete judgement of this case law
Babulal Enterprise V/s ACIT before Mumbai Bench of ITAT
pls help me. my mail id is shubham.an.aspirant @ gmail.com
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