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TMI Blog2013 (5) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... has been defined to mean a transaction in which a contract for the purchase or sale of commodity is settled otherwise than by the actual delivery or transfer of such commodity. However, as state above, the assessee was not a dealer in foreign exchange. In order to hedge against losses, the assessee had booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for export in some cases failed. Thus the assessee was entitled to claim deduction as a business loss. In favour of assessee. - TAX APPEAL NO. 131 of 2013 - - - Dated:- 28-3-2013 - AKIL KURESHI AND MS. SONIA GOKANI, JJ. For the Appellant K.M. Parikh. For the Respondent. ORDER:- Akil Kureshi, J. - Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dealer in foreign exchange. The assessee was a cotton exporter. The assessee was an export house. Therefore, foreign exchange contracts were booked only as incidental to the assessee's regular course of business. The Tribunal has recorded a categorical finding to this effect in its order. The Assessing Officer has not considered these facts. Under section 43(5) of the Income-tax Act, "speculative transaction" has been defined to mean a transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 the banks. In some cases, the export could not be executed and the assessee had to pay certain charges to the Bank and thereby incurred certain expenses. These expenses the 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 sub-section (5) of section 43 of the Act. It is true that the CIT (Appeals) has made some observations which would prima facie suggest that there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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