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2011 (8) TMI 246 - AT - Income TaxDissallowance - loss on account of valuation of interest rate swap - accounting principle of prudence u/s 145(2) - when anticipated profits on unmatured contracts are held, to be non-taxable, there is no good reason as to why anticipated losses on unmatured contracts can be taken into account while computing business income - Held that: - Just because anticipated profits are not assessed to tax, it would not follow, as a corollary thereto, that anticipated losses cannot be allowed as deduction in computation of business income - loss on valuation of interest rate swap is to be allowed as a deduction in computation of business income, a reference was made to Hon'ble Supreme Court's judgment in the cases of Sanjeev Woolen Mills vs CIT (2005 -TMI - 6166 - SUPREME Court) - relief is subject to the rider that the allowability in deduction in the current year is subject to verification of corresponding adjustment in the year in which next settlement date falls - Decided in favour of assessee.
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