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2015 (6) TMI 1020 - ITAT MUMBAI

2015 (6) TMI 1020 - ITAT MUMBAI - TMI - Mark-to-Market loss arising on re-valuation of forward contract agreements on the closing date of accounting year - whether is not a notional loss and, therefore, allowable? - Held that:- The learned CIT(A) followed the decision of DCIT vs. Bank of Bahrain and Kuwait (2010 (8) TMI 578 - ITAT, MUMBAI) and also the decision of CIT vs. Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT ] to hold that the liabilities for foreign exchange was inc .....

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or the Appellant: Shri Prakash Pathade For the Respondent: Shri K.A. Vaidyalingan O R D E R Per Sanjay Arora, A.M. This appeal by the Revenue is directed against the order passed by CIT(A)-27, Mumbai and it pertains to A.Y. 2009-10. 2. The only ground urged before us reads as under: - 1. Whether on the facts and circumstances and in law, the Ld. CIT(A) has erred in holding that Mark-to-Market loss of ₹ 7,05,11,295/- arising on re-valuation of forward contract agreements on the closing date .....

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cy risk. These derivative contracts are entered into within the framework of RBI guidelines. These contracts generally have a maturity profile which coincides with expected dates of foreign currency receivables or payables. Assessee consistently followed the accounting method wherein mark-to-market gain or liability dominated in foreign currency is being recognised as gain or loss in the Profit & Loss Account. In the ordinary course of business assessee had revalued the outstanding forward c .....

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