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2015 (5) TMI 606 - ITAT MUMBAIMark to market loss - revlauation of forward contract agreements on the closing date of accounting year - not a notional loss therefore allowable as per CIT(A) - Held that:- The Hon’ble Supreme Court in the case of ONGC Vs. CIT, [2010 (3) TMI 81 - SUPREME COURT], has reiterated the principles laid down in the case of Woodward Governor India Pvt (2007 (4) TMI 118 - HIGH COURT , DELHI) and observed that when the assessee maintained their accounts on mercantile system of accounting and there was no finding by the AO on the correctness or completeness of the account and that the assessee had complied with the accounting standards, laid down by the Central Government, can the “loss” suffered by it on account of fluctuation in the rate of reign exchange as on the date of balance sheet be allowed as expenditure under section 37(1) of the Act notwithstanding the fact that the liability had not been actually discharged in the year in which the fluctuation in the rate of foreign exchange had occurred and finally decided that the loss incurred on account of restatement of the liabilities in foreign exchange is allowable deduction. The detailed finding recorded by CIT(A) to the effect that loss on account of revaluation of pending forward contracts was revenue in nature, as per para 5 & 6, has not been controverted. Accordingly, we do not find any reason to interfere in the order of CIT(A) deleting the disallowance of loss on account of revaluation of pending forward contract. - Decided in favour of assessee.
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