Discontinued business

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2013 The assessee, in individual capacity, has entered into transactions in commodities spot exchange NSEL last year. He has declared income under the business head and filed the return. Now, the spot exchange is suspended and there is no business.

Is this to be considered as discontinuation of business and if yes, the same is to be informed to the Income Tax Department u/s. 176 (3)?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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25 November 2013 yes. if the assessee has no other activity, this event would be considered as discontinued business.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 November 2013 Suspension of the business at the NSEL is an event for the NSEL. So, NSEL is required to take care of Section 176(3).
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There are chances to continue the business in other manner also. The individual assessee can wait for opening of a New Exchange or may start a new business. So, he is not required to inform the ITD.
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Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2013 Thank you Sir.

The assessee has other income sources and will keep on filing returns as NSEL business was to earn better return on spare money as compared to other savings avenue. He keeps on investing/trading in derivatives as and when the opportunity arises.

In that case, the answer differs?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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27 November 2013 In that case you will have to follow Bafna ji's advice.