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2015 (3) TMI 4 - AT - Income TaxDisallowance of loss arising from the derivative transactions - whether loss speculative in nature? - as contended by the assessee, there was foreign currency exposure, as a result of conversion of rupee loans of the assessee into foreign currency loans and in order to hedge such exposure, the relevant derivative transactions were entered into by the assessee, as a measure of risk management - Held that:- Going through the relevant RBI guidelines, underlying the purpose of relevant derivative transactions, as well as the relevant terms and conditions of such transactions agreed between the assessee and the Axis Bank, we find ourselves in agreement with the contention of assessee that the nature of the relevant derivative transactions was not properly appreciated either by the Assessing Officer or by the learned CIT(A) and the said transactions were treated by them as speculative transactions by referring to the provisions of S.43(5) without appreciating the correct nature of the relevant derivative transactions. Keeping in view this position, clearly emanating from the relevant documents as well as the orders of the authorities below, we are of the view that the matter should go back to the file of the Assessing Officer for deciding the same afresh, after properly appreciating and ascertaining the exact nature of the relevant derivative transactions. - Decided in favour of assessee for statistical purposes.
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