2025 (9) TMI 438

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed in levying penalty u/s 271A of the Act, by considering F & O turnover Rs. 55,64,95,179/- as against Actual F & O turnover of Rs. 29,28,652/- and Speculation turnover Rs. 2,87,421/-. As per Section 44AB of the Income Tax Act specifies the conditions for a tax audit Section 44AB(a): If the total turnover from F&O trading exceeds Rs 10 crore, an F&O trading tax audit is mandatory. Since the cumulative turnover from F&O and Speculation transactions are below the threshold limit, there is no liability of Tax Audit. 2. That is my only income under the head Income from Business is trade in F&O segment and speculative transactions. All other equity transactions are considered under the head income from Capital Gain. 3. As per g....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....2 declaring income of Rs. 4,92,310/-. The case was scrutinized and the Assessing Officer ('AO') completed the assessment under section 143(3) r.w.s. 144 of the Income Tax Act, 1961 ('Act') at income of Rs. 30,31,456/-. The AO took value of entire F & O trading as turnover of the assessee. As per the AO, the turnover of the assessee is Rs. 55,64,95,179/-, whereas, as per the assessee, the F & O turnover is Rs. 29,28,652/- and Speculation turnover is Rs. 2,87,421/-. The AO, taking note of the fact that the assessee who was required to maintain his books of accounts stipulated under section 44AA of the Act has not maintained his books of accounts; therefore, he initiated penalty proceedings under section 271A of the Act and later, levied the p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... under Section 44AB of the Act]. According to which the turnover or gross receipt in respect of transactions in derivatives, futures and options is to be determined as follows: * In the case of squared-off transactions, the total of favourable and unfavourable differences shall be taken as turnover. * Premium received on the sale of options is also to be included in turnover. However, where the premium received is included for determining net profit for transactions, the same should not be separately included. * In respect of any reverse trades entered, the difference thereon should also form part of the turnover. * In case of an open position at the end of the financial year (i.e., trades which are not s....