Notice u/s 139(9) as a result of new amendment.

Finance professional

Hi All,

W.E.F A.Y 2012-13, the business of trading in shares has been included under the purview of section 44AD, as a result of which the assesses who are filing ITR 4 (i.e whoever are showing the trading in shares as business) have to get their books of account audited by a CA if their profit is less than 8% of turnover. I have few queries connected with this amendment:

1. If I own an NCD and if it is there in my DP, whether it will form part of my closing stock and if it forms part of it, whether the interest earned from it will form part of my turnover?

2. If I have shown shares as my inventory in the last year but this year I want to show it as an investment, is it possible to do so and if it is possible, how to do so?

3. This being new amendment and having a significant impact, how people are approaching it?

Thanks,

Ganesh

 
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Advocate

If Profit is less than 8% of turnover then assessee has to maintain books of account and needs to be audited  by auditor  and if NCD is forming part of closing stock  than interest received is part of turn over . If NCD is shown separately  as investment than  also  interest is part of turnover.

You can convert shares appearing in closing stock as investment  by taking market value or cost whichever is lover and value it accordingly and show in balance sheet as investment and reduce your closing stock accordingly .

 
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