https://www.taxtmi.com/caselaws?id=7112 Forward contracts of sale entered into by a merchant as hedges against future price fluctuations in respect of forward purchase contracts do not fall within proviso (a) to the second Explanation to section 24(1) of the Income-tax Act, 1922. The proviso protects only hedge contracts of purchase connected with contracts for actual delivery of goods manufactured or merchandise sold, and does not extend to sale contracts entered as hedges against purchase contracts. As a result, the loss arising from such forward sale transactions remains speculative and is not admissible for set-off against other business income. en-us Fri, 04 Aug 1967 00:00:00 +0530 Tue, 10 Feb 2009 19:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7112 Forward contracts of sale entered into by a merchant as hedges against future price fluctuations in respect of forward purchase contracts do not fall within proviso (a) to the second Explanation to section 24(1) of the Income-tax Act, 1922. The proviso protects only hedge contracts of purchase connected with contracts for actual delivery of goods manufactured or merchandise sold, and does not extend to sale contracts entered as hedges against purchase contracts. As a result, the loss arising from such forward sale transactions remains speculative and is not admissible for set-off against other business income. Case-Laws Income Tax Fri, 04 Aug 1967 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7112