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2019 (6) TMI 1527 - AT - Income TaxDisallowance on Loss on Forex Derivatives - Whether foreign exchange is a commodity as envisaged u/s 43(5)(d)? - speculative transaction or not? - HELD THAT:- Foreign exchange derivate loss in respect of capital items is certainly capital expenditure and cannot be allowed as loss whereas, in respect of revenue items, it can be allowed as revenue loss. In the present case, the AO had not undertaken the exercise of verifying whether foreign exchange derivate transaction are in respect of capital items or revenue item, there is no material on record to establish the nature of transactions. We remand this issue back to the file of the AO for limited purpose for examining the issue. Appeal of the assessee is partly allowed for statistical purpose.
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