14 September 2010
Dear Sir/Madam, For an individual is intra-day trading in shares to be considered as income from speculative business? Pls rp its urgent .
14 September 2010
Speculation loss is always treated as loss from Speculation Business.
But it is treated differently from normal business loss.
No set off is available of speculative business loss from normal business loss.
However; you can carry forward such speculative losses for four next assessment years to be set off from speculative business.
(Humour : Government wishes that one should do profit from speculative profits only if he has incurred losses from speculation and that is why bookies do hard to carry on their "professional" activities).
14 September 2010
Even one transaction done will be speculative business income and not capital gains. It will be termed as adventure in the nature of trade. Single transaction can be treated as speculation business - Neither repetition nor continuity of similar transactions is necessary to constitute a transaction an adventure in the nature of trade and even a single transaction may constitute speculation business - CIT v. Bhikamchand Jankilal [1981] 131 ITR 554 (MP).
There is nothing in the context of Explanation 2 to show that a single speculation transaction, even though it is an adventure in the nature of trade cannot amount to speculative business - CIT v. Ganga Prasad Birla (HUF) [1992] 63 Taxman 145/[1993] 199 ITR 173 (Cal.).
On appeal, the order of the ITO was confirmed by the AAC. In the appeal before the Tribunal it was argued that the transaction in which the assessee incurred the loss of Rs. 13,500 did not amount to a speculative transaction. The Tribunal did not decide this question. Assuming that the transaction amounted to speculative transaction,
" the Tribunal held that the transaction being a single transaction did not amount to a speculation business within the meaning of section 73(1) of the Act and there was no bar for setting off the loss incurred in the said transaction against the income of the same year from the other business of the assessee."
And if i am not wrong the question if for intraday trading for shares and the case is of F&O. its a future contract....
CAclubindia
