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2015 (4) TMI 1296 - AT - Income TaxDisallowance of Mark to Market loss in trading of derivates - HELD THAT:- Respectfully following the decision of the Tribunal in the case of Edelweiss Capital Ltd. [2012 (10) TMI 223 - ITAT, MUMBAI] which view has further been followed by another co-ordinate Bench of this Tribunal in the case of Shri Ramesh Kumar Damani vs. The Addl. CIT. [2010 (11) TMI 851 - ITAT MUMBAI], it can be safely held that it is not only the actual stock but derivatives can also be held as stock in trade and the principle "cost or market price whichever is lower" has been rightly followed by the assessee in valuing the derivatives and further when the derivates are held as stock in trade then whatever rules apply to the stock in trade will have to apply to their valuation also. While anticipated loss is taken into account while valuation of closing stock, anticipated profit in the shape of appreciated value of the closing stock is not brought into account, as not prudent trader would care to show increased profits before actual realization. Respectfully following the law laid down by the authorities as mentioned above, we hold that the assessee has rightly claimed mark- to-market loss which is liable to be allowed. The learned CIT(A) has rightly allowed the claim of the assessee, his order is hereby upheld. - Decided in favour of assessee.
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