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2017 (12) TMI 1815 - ITAT MUMBAIMark to market losses on account of diminution in the value of outstanding equity derivatives - diminution in the value of stock-in-trade - HELD THAT:- Neither the AO nor CIT(A) has discussed the facts but we find from the details that the assessee has valued outstanding equity derivative transactions at lower of cost or market value in the balance sheet as on 31-03-2010. Admittedly, the assessee has debited mark to market losses on account of diminution in the value of outstanding equity derivatives. This issue has been settled by Hon’ble Supreme Court in the case of Woodward Governor India P. Ltd: [2009 (4) TMI 4 - SUPREME COURT] wherein, it is clearly held that losses suffered by the assessee on account of fluctuation in the rate of foreign exchange has on the date of balance sheet is item of expense under section 37(1) - For valuing closing stock at the end of the year, the value prevailing on the last date is relevant because profit and loss is embedded in the closing stock. While anticipated loss is taken into account and the anticipated profit in the shape of appreciation of value of the closing stock is to be brought into accounts. In view of the principle laid down by the Hon’ble Supreme Court, we are of the view that the assessee is entitled to this loss and he has rightly claim so. Accordingly, we reverse the orders of the lower authorities and allow this claim of the assessee. TDS u/s 192/194H - disallowance of commission payment for non-deduction of TDS invoking the provisions of section 40(a)(ia) - HELD THAT:- Respectfully following the assessee’s own case for AY 2005-06 [2016 (6) TMI 1431 - ITAT MUMBAI] it is that to held the commission paid to the directors in the nature of salary and hence, no disallowance can be made by invoking the provisions of section 40a(ia) of the Act because there is no provision for disallowance of salary under the provisions of section 40a(ia) of the Act.. Accordingly, we dismiss the appeals of Revenue.
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