TMI Blog2019 (5) TMI 1593X X X X Extracts X X X X X X X X Extracts X X X X ..... ategorically noted that it was a complete party wise details of the purchase orders against which exports were made in USD during the year and also perused the copy of purchase orders exceeding USD 25,000. In fact assessee has exported goods during the year under consideration amounting to USD 19,67,954 as against availability of purchase orders amounting to USD 22,13,453. It cannot be held that the future contracts were not connected to the assessee s export and was a separate transactions de-hors the export of the assessee. Once the forward contracts for foreign currency was directly related to export and import and incidental to the business of assessee, then it cannot be held that it is in the nature of speculative transaction within the scope of ambit of section 43(5). See BADRIDAS GAURIDU (P.) LTD. [ 2003 (1) TMI 61 - BOMBAY HIGH COURT] - decided against revenue - ITA No. 5720/Del/2015 - - - Dated:- 13-5-2019 - Shri Amit Shukla, Judicial Member And Shri L.P. Sahu, Accountant Member For the Assessee : Shri Salil Agarwal, Shri Shailesh Gupta, Adv. For the Department : Shri J.K. Mishra, CIT(DR) And Shri Surernder Pal, Sr. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts were entered only for hedging of foreign exchange fluctuation risk not for- speculation. (iv) The assessee was the actual user of the forward contracts and it had full intention to export goods to Europe other countries. The loss was only due to the unforeseen circumstances prevailing in the global market which were unprecedented beyond the control of the assessee. (v) The hedging was done on the basis of confirmed orders with customers past export performance of the assessee. The forward contracts were entered before the actual delivery of gods which is evidenced by the purchase order entered with the customers. (vi) The assessee has not entered into any act which was prohibited under the law. There was no violation of any provisions of FEMA as governed by RBI for risk management under which entering of forward contracts In Foreign exchange was permitted only to exporters. (vii) The assessee has incurred a real loss and not a notional or fictitious loss. The loss has been claimed on actual payment and not on notional basis. (viii) The loss claimed is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as customers and has undisputed track record of export sales for the past several years. Secondly, while conducting its business, assessee has entered into forward contract with M/s. Standard Chartered Bank and Citi Bank N.A. to hedge its export receivables denominated in foreign currency. The same was offered by the bankers after verifying the underlying export orders executed with MNCs. The forward contracts were in conformity with the regulations and criteria prescribed by Reserve Bank of India; thirdly, he noted that assessee has filed complete party wise details of the purchase orders against which exports were made un USD during the year and is also filed copies of PO s exceeding USD 25,000; and fourthly, the AO has not disputed the genuineness of assessee in carrying out its business including its exports and also does not doubt the infrastructure of the assessee, the past history of actual exports made and the genuineness of the confirmed orders. Further, nowhere the AO has disputed the contracting terms with the bankers and the scientific basis and historical basis of the currency rates which went into freezing the negotiations of the forward contracts; and lastly, assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Ahmedabad in the case of Adani Enterprise (P) Ltd. vs DOT reported in 68 SO P 129. 5. Copy of judgment of Honble High Court of Bombay in the case of CIT vs D. Chetan Co. reported in 243 Taxman 356. 6. Copy of judgment of Hon ble High Court of Calcutta in the case of CIT vs Ambo Agro Products (P) Ltd. reported in 257 Taxman 1 56. 7. Copy of judgment of Honble High Court of Allahabad in the case of ACIT vs Surya International (P) Ltd. reported in 406 ITR 274. 8. Copy of order of Llon ble ITAT Delhi in the case of Silicon Graphics Systems (India) Pvt. Ltd. vs DCIT in IT A No. 2976/Del/2013. 9. Copy of order of Honble ITAT Delhi in the case of DCIT vs Matrix Clothing Pvt. Ltd. in ITA Nos. 2949 2950/Del/2014. 7. We have heard the relevant submissions and also perused the relevant finding given in the impugned orders as well as the material referred to before us at the time of hearing. The assessee company is engaged in the business of manufacturing and supply of automotive parts and also export the same to overseas customers. It had entered into hedging contract with Citi Bank and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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