https://www.taxtmi.com/caselaws?id=751409 ITAT Chennai set aside CIT(A)'s decision allowing foreign exchange derivative losses as business expenditure under section 37(1). The tribunal held that since the assessee was not a foreign exchange dealer, losses on forward contracts couldn't be treated as business losses without establishing direct nexus to business operations. Following Mumbai Tribunal precedents, the tribunal ruled that for forward transactions to qualify under section 43(5), they must have direct connection with goods manufactured or sold. The matter was remanded to CIT(A) for fresh adjudication, requiring the assessee to substantiate the business nexus with proper documentation. en-us Fri, 22 Mar 2024 00:00:00 +0530 Tue, 16 Apr 2024 08:24:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=751409 ITAT Chennai set aside CIT(A)'s decision allowing foreign exchange derivative losses as business expenditure under section 37(1). The tribunal held that since the assessee was not a foreign exchange dealer, losses on forward contracts couldn't be treated as business losses without establishing direct nexus to business operations. Following Mumbai Tribunal precedents, the tribunal ruled that for forward transactions to qualify under section 43(5), they must have direct connection with goods manufactured or sold. The matter was remanded to CIT(A) for fresh adjudication, requiring the assessee to substantiate the business nexus with proper documentation. Case-Laws Income Tax Fri, 22 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=751409