TMI Blog2018 (5) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee claimed by way of expenditure towards business. We do not find that the transaction can be stated to be in speculation as to cover under subsection (5) of section 43 of the Act. - Decided against revenue - R/Tax Appeal No. 508 of 2018 - - - Dated:- 11-5-2018 - MR. AKIL KURESHI AND MR. B.N. KARIA, JJ. For The Petitioner : Mr. Karan Sanghani for Mrs Mauna M Bhatt (174) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue herein is in appeal against the judgment of the Income Tax Appellate Tribunal raising following question for our consideration: Whether the Appellate Tribunal is right in law in deleting the addition made by the AO on account of treating the loss from specul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 6. In the decision of the Bombay High Court, the assessee was in the business of export of cotton. The assessee had entered into forward contract with banks in respect of foreign exchange. Some of these contracts could not be honoured for which the assessee had to pay ₹ 13.50 lacs which was debited to the profit and loss account. The assessee claimed the sum as business loss. Revenue was of the opinion that the loss was speculative in nature. Bombay High Court following the decision of the Calcutta High Court in the case of Soorajmull Nagarmull (supra) held that the expenditure would not be covered under section 43(5) of the Act as speculative transaction. It was observed as under: The assessee was not a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In one such contract, the assessee had to pay to the Bank difference of ₹ 80,491/which was claimed by the assessee as revenue expenditure. The Assessing Officer disallowed the claim. The High Court held that the assessee was not a dealer in foreign exchange and the foreign exchanges were only incidental to the assessee's regular course of business and the loss was thus not a speculative loss but incidental to the assessee's business and allowable as such. Facts in the present case are very similar. Admittedly, the assessee is not a dealer in foreign exchange. For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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