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Bifurcation of Income from shares

Nilesh Ranka (CA- Practice) (38 Points)

20 September 2017

Hi friends

I am share trader, In ay 15-16 I have intraday turnover of 12 cr. and delivery turnover of 35 lakhs.

Under the scrutiny assessment u/s 143(2) my AO treat my intraday turnover as speculative business and delivery turnover as Capital gains.

He bifurcate some part as business and other part as capital gains.

So I want to know that can he bifurcate total turnover in two parts. i.e. Speculative business and capital gains.

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178001 Points)
Replied 20 September 2017

Yes, it is justifiable...

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Nilesh Ranka (CA- Practice) (38 Points)
Replied 20 September 2017

I mean either treat whole turnover as business turnover or treat whole turnover as Capital gains..??

RAMA KRISHNAN (247 Points)
Replied 20 September 2017

no intraday transaction is speculative and the rest are cg

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178001 Points)
Replied 20 September 2017

Intraday cannot be treated as investment (for capital gains); while delivery based can be sometimes considered as business income provided the holding period be short and the trend is continued in earlier years...... or can be justified by assessee as its intention of earning as business.

suman (job) (48 Points)
Replied 25 September 2017

Sir,if my share trading portfolio treated as business trading ,can i offset loss arising from 1.intraday trading income with other business income?(I have profit from another business)2.delivery based trading with other business income

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178001 Points)
Replied 25 September 2017

1. Loss from speculative business (intraday trading) cannot be set off against any income other than income from speculative business. However, non-speculative business loss can be set off against income from speculative business.

2. Yes, provided it is treated as business income and not capital gains. As loss under head “Capital gains” cannot be set off against income under other heads of income.