TMI Blog2015 (10) TMI 2777X X X X Extracts X X X X X X X X Extracts X X X X ..... rward contracts, except the above referred three contracts were cancelled after maturity. Therefore, the allegation of the Department that forward contracts were cancelled prematurely is without any basis. That being the case, the principle laid down by the Hon'ble Jurisdictional High Court in Badridas Gauridu India Ltd. [ 2003 (1) TMI 61 - BOMBAY HIGH COURT ] clearly applies. Therefore, factually as well as by applying the principle of law, we are of the view that the loss claimed by the assessee cannot be treated as speculative loss and as a consequence it has to be allowed - ITA No. 3224/Mum/2012 - - - Dated:- 30-10-2015 - SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For the Appellant : Shri B.V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n settled other than by way of actual delivery is to be considered as speculative in nature. Hence, as per section 73 r/w CBDT Instructions no.3 of 2010 dated 23rd March 2010, cannot be allowed as business loss. He, therefore, propose to disallow the same. Though the assessee submitted a detailed explanation stating therein that such loss has been incurred in the course of its regular business but the Assessing Officer did not find merit in the submissions of the assessee. He observed that the assessee has not been able to link any of the forward contract with specific order and ultimately, he treated the loss claimed as speculative and disallowed the same. Being aggrieved of such disallowance, the assessee preferred appeal before the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05, dated 29th April 2009, which was confirmed by the Hon'ble Jurisdictional High Court. 7. The learned Departmental Representative submitted before us, the facts in Badridas Gauridu India Ltd. (supra) are different as in that case, loss resulted on account of failure of contract. However, in assessee s case, the contracts were cancelled prematurely. Hence, the ratio laid down in Badridas Gauridu India Ltd. (supra) would not apply. The learned Departmental Representative referring to the decision of the Tribunal, Mumbai Bench, in London Star Diamond Co. Ltd. v/s DCIT, ITA no.616/Mum./2012, dated 11th October 2013, submitted, when the contracts are prematurely cancelled, the assessee cannot claim loss. Referring to the observations ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f two contracts, dated 11th April 2007 and 26th April 2007, which are for export of goods, the contracts were cancelled before maturity but the assessee has booked profit. Similarly, forward contract dated 23rd August 2007, for import was also cancelled before maturity but the assessee has again booked profit. Thus, from the aforesaid fact, it is very much clear that forward contracts, except the above referred three contracts were cancelled after maturity. Therefore, the allegation of the Department that forward contracts were cancelled prematurely is without any basis. That being the case, the principle laid down by the Hon'ble Jurisdictional High Court in Badridas Gauridu India Ltd. (supra) clearly applies. Moreover, in assessee s ow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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