Valution of closing stock of shares

it will be valued at cost since, it is not inventory of the company

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?

Dear Manvi,

1. As far as the shares/derivatives go, the Turnover for 44AB is the amount of profit/loss…and not the sale/purchase
2. Since these are not goods, and as such AS 2 wont apply..these are ST investments

can u send me some relevant links to support ur answer?

can you give me your email id?...i ll email it to u

manvimehrotra @ gmail.com

Thankyou so much..:)

You are welcome…

Will email it to you the files by evening….is that ok???

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..

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

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?

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..

Your are welcome :)