9911796707
TMI BlogDisallowance of provision for foreign exchange fluctuations and loss on forward contracts u/s 43(5)...Disallowance of provision for foreign exchange fluctuations and loss on forward contracts u/s 43(5) regarding speculative transactions. It clarifies that foreign currency is not a trading commodity, and the provisions of Section 43(5) are not applicable. To qualify as a speculative transaction, there should be a contract for purchase or sale of a commodity settled on a net-net basis without actual delivery. In this case, the contracts were settled by actual delivery, not on a net-to-net basis, and hence do not fall within the meaning of a speculative transaction u/s 43(5). Following the Supreme Court's decision in Woodward Governor India (P.) Ltd, the ITAT upheld the CIT(A)'s order allowing the provision for foreign exchange fluctuations and loss on forward contracts as expenditure for the year. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
