Manvi Mehrotra (Associate Tax Consultant) (88 Points)
25 September 2013A company deals in purchasing and selling shares through a broker. What will be the method to value the closing stock of the securities?
Ankit
(CA, CS)
(3064 Points)
Replied 25 September 2013
it will be valued at cost since, it is not inventory of the company
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
See, the company is investing in shares through a broker and all the transaction of purchase and sale of securites are being recorded in the form of purchases and sales in books of accounts..
the co. has sold shares of the value exceeding Rs. 1 Cr..
so is the co. liable for tax audit u/s 44AB?
and why do are we not following the basic method i.e. cost or nrv, whichever is lower?
Ankit
(CA, CS)
(3064 Points)
Replied 25 September 2013
Dear Manvi,
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
can u send me some relevant links to support ur answer?
Ankit
(CA, CS)
(3064 Points)
Replied 25 September 2013
can you give me your email id?...i ll email it to u
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
manvimehrotra @ gmail.com
Thankyou so much..:)
Ankit
(CA, CS)
(3064 Points)
Replied 25 September 2013
You are welcome…
Will email it to you the files by evening….is that ok???
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
Thanks..
Its a little urgent..if u can tell me the relevant section or site, i wl search it myself..we have a client waiting on this issue..
CA Lokesh Pokharna
(CA (Ahmedabad Bhilwara Chittorgarh))
(4128 Points)
Replied 25 September 2013
go through this link it will help you. or see section 43(5)
/forum/tax-audit-turnover-u-s-44ab-in-shares-trading-145303.asp
CA Lokesh Pokharna
(CA (Ahmedabad Bhilwara Chittorgarh))
(4128 Points)
Replied 25 September 2013
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
lokesh..
can you explain me one thing..
suppose a company is purchasing and selling shares through a broker throughout the year.
partial selling is intra day where as partial selling is not intra day but sold within the year...
do i need to breakup the whole overall business into speculative and non speculative?
CA Lokesh Pokharna
(CA (Ahmedabad Bhilwara Chittorgarh))
(4128 Points)
Replied 25 September 2013
for better solution you should advice to keep separate account for trading & investment. but in this current case there is need of proper breakup into speculative & non speculative..
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 25 September 2013
CA Lokesh Pokharna
(CA (Ahmedabad Bhilwara Chittorgarh))
(4128 Points)
Replied 28 September 2013
Your are welcome :)
CAclubindia
