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2016 (2) TMI 502 - ITAT MUMBAIDisallowance of loss suffered in cancellation of foreign currency forward contracts by treating the same as speculation loss - Held that:- Forward contracts entered by the assessee, an exporter and not the dealer in foreign exchange, with the Banks as incidental to the export business, are business transactions and loss or gains is not of speculation nature. The loss arising on cancellation of matured forward contracts was allowable as deduction We are unable to agree with the view taken by the tax authorities on this issue. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to allow the claim relating to loss arising on cancellation of foreign exchange forward contracts. - Decided in favour of assessee
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