TMI Blog2015 (10) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... s been filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] dated 14.12.2012 relevant to assessment year 2009-10. 2. The sole ground taken by the Revenue in this appeal is read as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the addition of ₹ 8,55,86,854/- made on account of mark to market loss claimed on account of trading in derivative transactions, without appreciating the fact that the loss claimed on the basis of value of derivative as on 31st March is merely a notional loss and the actual loss or the profit in respect of such derivative transaction would get crystallized only at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when such future date of performance of contract becomes due, then the predetermined price is compared with the actual market rate of the booked stock and the difference, if any, is paid by the parties without actually purchasing or selling the stocks in question. The daily market rate of the said stock in question is taken and the difference between the market rate and the predetermined rate is daily calculated and the difference margin, if any, is received/paid to the broker and finally on the stipulated date the contracts are squared off resulting into actual loss or profit. The contracts in such type of cases can be squared off before the arrival of actual performance date of contract, as the profit and loss are calculated on daily basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Profit Loss account the value of stock in trade at the beginning and at the end of the year should be entered at cost or market price, whichever is lower. While anticipated loss is taken into account, anticipated profit in the shape of appreciated value of the closing stock is not brought into account, as no prudent trader would care to show increase profits before actual realization. Profits for income-tax purposes are to be computed in accordance with ordinary principles of commercial accounting, unless, such principles stand superseded or modified by legislative enactments. Unrealized profits in the shape of appreciated value of goods remaining unsold at the end of the accounting year and carried over to the following year' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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