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2013 (1) TMI 783 - AT - Income TaxMark to Market Loss - Rule of Prudence - AO had disallowed mark- to- market loss claimed on account of trading in derivative transactions. The reason assigned by the AO was that loss on the last date of financial year was in the nature of noncrystallized loss and such loss should be added back for the purpose of computing taxable income of an assessee. - HELD THAT:- Rule of prudence that means that while anticipated losses can be taken note of while valuing the closing stock, anticipated profits cannot be recognized, is applicable in this case. The addition made by disallowing the mark-to-market loss claimed on account of trading in derivative transactions should be deleted. Decision in the case of EDELWEISS CAPITAL LTD., MUMBAI VERSUS INCOME TAX OFFICER 3 (1) (1) , MUMBAI [2012 (10) TMI 223 - ITAT, MUMBAI], relied upon. Decision in favour of assessee.
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