Tax audit on shares transactions

This query is : Resolved

Chirag (Querist)
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26 July 2007 Shares transactions are done through out the year. The assessee is a salaried employee. Sale of shares during the year exceeded Rs. 1 crore. Should the assessee go for tax audit. Whether the I. T. Dept. can say that dealing in shares is his business and not his investments.

SUBRAMANIA SARMA G

SUBRAMANIA SARMA G (Expert)
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26 July 2007 Even if the assessee has done the trading in shares not as a business, as per the recent circular from the department, the criteria if applied would certainly result in being in a business of share business. As a consequence the tax audit requirements will follow. It would be very very difficult to prove that the transactions are of investment in nature in the coming years.

CA.P. ARUMUGARAJ, ACA

CA.P. ARUMUGARAJ, ACA (Expert)
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26 July 2007 tax audit will be applicable.... there is no exemption from the purview of tax audit.... whatever be the role, the share trading transaction is amount to only business......

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Chirag

Chirag (Querist)
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27 July 2007 Thanks