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2014 (7) TMI 1212 - AT - Income TaxLoss on account of foreign exchange fluctuation - neither notional nor speculative - allowable business expenditure - Held that:- It is not in dispute that the assessee is exposed to fluctuations in foreign exchange given its scale of operations and hedging of such transactions is the need of the business. It is also not in dispute that except being profit booked by MTM valuation, the entire loss claimed by the assessee was actual loss incurred on cancellation of the forward contracts. It is not the case of the Revenue that at a given point of time all the receivables and all the payables can be adjusted each other. There may be a position that the payments for imports may not be due as on a particular date and vice versa. Having regard to the overall circumstances the learned CIT(A) applied the ratio of the Hon'ble jurisdictional High Court decision in the case of CIT vs. Badridas Gauridu Pvt. Ltd. [2003 (1) TMI 61 - BOMBAY High Court] to hold that the loss incurred by the assessee cannot be treated as a notional loss but an actual loss which is allowable as deduction.
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