Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: TDS :: cpt :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: empanelment :: articles on VAT and GST in India :: VAT RATES :: VAT Audit :: due date for vat payment :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4%
 
 
ITAT-Constitution of Benches »
 Income Tax Appellate Tribunal, Bangalore Benches, Bangalore. Constitution For The week 20.03.2017 To 23.03.2017.
 Income Tax Appellate Tribunal, Hyderabad Benches, Hyderabad. Constitution For The Period From 20.03.2017 To 30.03.2017.
 Income Tax Appellate Trtbunal Kolkata Benches Kolkata Causelist For Bench 'A' Sub Case list for the period from 20/03/2017 To 23/03/2017 (24/03/2017 is M.A.Day)
 Income Tax Appellate Trtbunal Chennai Benches Chennai Constitution For The Week From 2010312017 To 2310312017
 Income Tax Appellate Tribunal Ahmedabad Benches , Ahmedabad S/shri Rajpal Yadav, Jm & N.K. Billaiya, Am Causelist For Bench 'A' Date : 20/03/2017
 Income Tax Appellate Tribunal: Panaji Bench: Panaji Cause List For The Week From 20.03.2017 To 31.03.2017 Before Shri P. K. Bansal-Am And Shri George Mathan – Jm
 Income Tax Appellate Tribunal New Delhi Bench New Delhi Constitution of Benches from 20.03.2017
 Income Tax Appellate Tribunal Pune Bench Pune Causelist for Bench 'A' For the Week Ending 24/03/2017
 Income tax Appellate Tribunal : Kolkata Benches : Mumbai Benches Mumbai Consolidated Cause list of SA MA Pronouncement for friday 17/03/2017
 Income tax Appellate Tribunal : Kolkata Benches : Kolkata Constitution of Kolkata Benches From 20/03/2017 To 23/03/2017 (24th march, 2017 day)
 Income Tax Appellate Tribunal, Delhi Benches : New Delhi stay list dated 15.03.17

S. Vinodkumar Diamonds Pvt. Ltd vs. ACIT (ITAT Mumbai)
May, 08th 2013

S. 43(5): Loss on foreign currency forward contracts by a manufacturer/ exporter is a “speculation loss” and not a “hedging loss”

The assessee, a dealer in diamonds, entered into forward contracts in US dollars. Some of the contracts were cancelled during the year and some were outstanding at the end of the year. The assessee suffered a loss of Rs. 4.02 crores on account of the cancellation and “marked to market” of the said forward contracts and claimed that sum as a deduction. The AO & CIT(A), relied on Instruction No. 03/2010 dated 23-3-2010 and held that the said loss arose on account of a “speculative transaction” while the assessee claimed that it arose out of a “hedging transaction”. HELD by the Tribunal:

There is a difference between a “speculative transaction” and a “hedging transaction”. S. 43(5) defines a “speculative transaction” to mean a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips. Proviso (a) to s. 43(5) refers to a “hedging transaction” as a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchandising business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him. In order for a transaction to be a “hedging transaction”, the commodity dealt in should be the same. If the subject matter of the transaction is different, it cannot be termed a hedging transaction. Also, the merchandise in respect of which the forward transactions have been entered into by the assessee must have a direct connection with the goods sold by him. On facts, as the assessee was not dealing in Foreign Exchange, the forward transactions entered into by it cannot be held to be hedging transactions. As the assessee is dealing in diamonds, only the forward contracts entered into for diamonds would be covered by Proviso (a) to s. 43(5). Consequently, the loss suffered by the assessee is a speculative loss.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions