can i get some real life examples for speculation business? with explanation to whom and al it is treated as speculation / non speculation / investment activity?
CA B Anand (CHARTERED ACCOUNTANT) (198 Points)
15 June 2010can i get some real life examples for speculation business? with explanation to whom and al it is treated as speculation / non speculation / investment activity?
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26258 Points)
Replied 02 July 2010
When there is no actual delivery of goods then it is called as speculation business practically. For example; if a persons buys certain shares of a company and sells off them on same day then this is a speculation transaction.
The purchase and sale of these shares would not be included in the turnover becuase no delivery was taken.
When the same transaction is sold on next day then it is said that the person has taken delivery thereof and on next day he has sold it. This is a trading activity i.e. non-speculation.
When one person buys certain shares and keep it for 2 or 3 months (say) then it is an investment activity because one may find that in between these 2-3 months prices increased but he didn't sold the shares because he wish to sell after a target is achieved. This is an investment activity.
CAclubindia
