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2013 (7) TMI 355 - ITAT MUMBAIMark-to-market loss on account of trading in derivative transactions - CIT(A) deleted the addition made by the AO - assessee company engaged in the business of granting of loans and advances against shares and securities, also traded in derivative segment by entering into future and option contracts - Held that:- Respectfully following the decision of in the case of Edelweiss Capital Ltd. (2012 (10) TMI 223 - ITAT, MUMBAI) & Shri Ramesh Kumar Damani vs. The Addl. CIT [2010 (11) TMI 851 - ITAT MUMBAI] wherein 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 the assessee has rightly claimed mark-to-market loss which is liable to be allowed. In favour of assessee.
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