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TMI Blog2014 (3) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... as a revenue deduction - HELD THAT:- In the cases relied on by the learned counsel, the facts are that the assesses had minimized the loss arising out of the fluctuation of Forex rate by cancelling the forward contract. Those forward contracts were entered into to protect the final outcome of its export proceeds from foreign exchange rate fluctuation. But in the present case, the Assessing Officer has clearly established that the assessee has carried out speculation business in the nature of trading in derivatives. The loss incurred by the assessee while dealing in derivatives is in the nature of speculation loss, as explained by the Assessing Officer. Therefore, we confirm the orders of the lower authorities on this point and reject the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exchange contract booked value as per the rate of exchange prevailing on the last date of the previous year. It is the case of the assessee that the Commissioner of Income-tax(Appeals) ought to have appreciated that the assessee had booked option contract of exchange to optimize the liability in respect of foreign currency loan on working capital and hence the liability incurred on foreign exchange contract on account of exchange fluctuation is only in the revenue field and ought to have allowed as a revenue deduction. 3. The Assessing Officer has considered this as an item of derivative loss. The Assessing Officer held that the transactions entered into by the assessee, as specified in the provisions of sec.43(5) qualified to be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter very carefully. In the cases relied on by the learned counsel, the facts are that the assesses had minimized the loss arising out of the fluctuation of Forex rate by cancelling the forward contract. Those forward contracts were entered into to protect the final outcome of its export proceeds from foreign exchange rate fluctuation. But in the present case, the Assessing Officer has clearly established that the assessee has carried out speculation business in the nature of trading in derivatives. The loss incurred by the assessee while dealing in derivatives is in the nature of speculation loss, as explained by the Assessing Officer. Therefore, we confirm the orders of the lower authorities on this point and reject the grounds rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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