Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (4) TMI 159 - AT - Income TaxProvision for loss on mark to market treated as notional loss - Whether the CIT(A) was justified in deleting the addition on account of provisions for loss on mark to market, on derivatives by treating it as notional loss – Held that:- The decision in Edelweiss Capital Ltd., Mumbai Versus Income Tax Officer 3(1) (1), Mumbai [2012 (10) TMI 223 - ITAT, MUMBAI] followed - the loss due to a fall in price below cost is allowed even if such loss has not been actually realized - The derivatives have been treated as stock-in-trade then there is nothing unusual in the assessee valuing each derivative by applying the rule cost or market whichever is lower - ICAI in its guidelines have also approved of the rule of prudence which really means that while anticipated losses can be taken note of while valuing the closing stock, anticipated profits cannot be recognized - The anticipated loss cannot be treated as a contingent liability – Decided against Revenue.
|