Value of sale transactions of commodity through MCX without delivery could not be considered as turnover for purpose of section 44AB.
In the instant case, the controversy revolved around as to whether online transactions of future commodities made at MCX would form a part of turnover for purpose of tax audit under section 44AB?
i)After considering section 18 of the Sale of Goods Act, 1930 it was observed that no property in the said units was passed on to the assessee as the assessee never acquired the property in the units as the units contracted to be bought were future unascertained goods.
ii)Similarly, it could not pass on the property to the party to whom the units were contracted and, therefore, there was no 'sale' or 'turnover' effected by the assessee in the legal sense for the purposes of getting the accounts audited under section 44AB.
2)In the instant case also, the transaction of buying and selling of commodities was a speculative activity where no physical delivery was taken or given. Thus, following the case of Growmore Exports Ltd. (supra), it was to be held that the value of the sale transactions of commodity through MCX without delivery could not be considered as turnover for the purpose of section 44AB.