https://www.taxtmi.com/caselaws?id=6961 Loss arising from forward sale contracts settled otherwise than by actual delivery was treated as speculative under Explanation 2 to section 24(1) of the Income-tax Act, 1922, and therefore could not be set off against non-speculative business income. The assessee's cotton processing activity was recognised as manufacturing, but that did not change the character of the impugned contracts. The statutory hedging exception in clause (a) of the proviso to Explanation 2 did not apply because there was no corresponding contract in raw materials or merchandise entered into to guard against price fluctuations. The proviso operated as a substantive restriction on set-off of speculative losses. en-us Fri, 04 Mar 1966 00:00:00 +0530 Sat, 07 Feb 2009 11:44:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6961 Loss arising from forward sale contracts settled otherwise than by actual delivery was treated as speculative under Explanation 2 to section 24(1) of the Income-tax Act, 1922, and therefore could not be set off against non-speculative business income. The assessee's cotton processing activity was recognised as manufacturing, but that did not change the character of the impugned contracts. The statutory hedging exception in clause (a) of the proviso to Explanation 2 did not apply because there was no corresponding contract in raw materials or merchandise entered into to guard against price fluctuations. The proviso operated as a substantive restriction on set-off of speculative losses. Case-Laws Income Tax Fri, 04 Mar 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6961