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2015 (1) TMI 1275 - AT - Income TaxDisallowance of foreign currency derivative loss by treating it as speculation loss - not allowing set off against regular business - Held that:- The definition of “speculative transaction”, will not apply to a situation where the purpose of entering a forward contract was to hedge/safeguard against any loss on account of repayment of principal amount of the loan: cancellation of the contract was identical to that object and consequently any loss/gain arising from such cancellation is directly related to repayment of the loan. Further, attention is also drawn to proviso (c) to s.43(5) of the Act, which excludes a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing, etc. to guard against loss which may arise in the ordinary course of his business to such member from the definition of speculative transaction. Thus we hold that Forex contracts entered into by the assessee will not fall under the definition of “speculative transaction” - Decided in favour of assessee. Denial of duty draw back while computing deduction under section 80IB - Held that:- We do not find any infirmity or good reason to interfere with the order of Commissioner of Income Tax (Appeals) since the Commissioner of Income Tax (Appeals) has only followed the decision of Hon'ble Supreme Court in the case of Liberty India v. CIT (2009 (8) TMI 63 - SUPREME COURT ) in concluding that duty drawback is not profits derived from industrial undertaking for the purpose of computing relief under sec.80IB of the Act. - Decided against assessee.
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