|QUERY:||Assessee falls under the definition of “eligible assessee” as provided in Explanation (a) to section 44AD. His turnover is not exceeding one crore rupees (taking into consideration positive & negative figures). Assessee maintains regular books of account. Assessee has incurred speculation loss of Rs. 5,00,000/- on share trading, which he wants to carry forward and assessee has incurred business loss of Rs. 3,00,000/- in an eligible transaction in respect of trading in derivatives as provided in section 43(5)(d) & (e), which he wants to set-off against income from other sources. In this connection assessee has the following question,
(i) Will speculation business & business carried out in eligible transaction in respect of trading in derivatives as provided in section 43(5)(d) & (e) be treated as “eligible business” as provided in Explanation (b) to section 44AD.
(ii) If yes, will it be necessary to carry out Audit u/s. 44AD to carry forward speculation loss & set-off business loss in the case of above facts?
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|SECTION(S):||43(5)(d) & (e), 44AD|
|CATCH WORDS:||Presumptive taxation-Eligible assessee|
As per Explanation 2 of section 28 of the Act, the speculative business is distinct from any other business. So speculation business is a separate business from eligible transaction as defined in Explanation 2 to section 43(5).