speculation bussiness

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2010 a wholesale dealer enter into a contract of purchase with a person and at the same time enter into a contract of sale with other person . later on the person to whom he enter in contract of purchase has not deliver good to him as a result the dealer have to settle the price difference with the seller and has he incur a loss. whether its a speculation loss or not. if not what accounting traetment will be as per income tax act,

CA Amit Joshi

CA Amit Joshi (Expert)
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24 February 2010 It is not a speculation loss bcz loss is during the course of business. In income tax the whole loss is allowed. so book the loss as business transaction....