https://www.taxtmi.com/caselaws?id=752289 ITAT Delhi upheld CIT(A)'s decision allowing deduction of foreign exchange forward contract losses on mark-to-market basis. Revenue challenged the allowance of forex losses claiming they were notional/speculative. Tribunal held that forward contracts entered for hedging export proceeds were business transactions, not speculative. Losses on currency conversion constitute trading losses allowable under mercantile accounting. Forward contracts being binding and enforceable, losses due to adverse exchange fluctuations on balance sheet date were deductible. Premium account expenditure representing difference between forward and spot rates also allowed as business expenditure. en-us Tue, 30 Apr 2024 00:00:00 +0530 Tue, 07 May 2024 09:39:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=752289 ITAT Delhi upheld CIT(A)'s decision allowing deduction of foreign exchange forward contract losses on mark-to-market basis. Revenue challenged the allowance of forex losses claiming they were notional/speculative. Tribunal held that forward contracts entered for hedging export proceeds were business transactions, not speculative. Losses on currency conversion constitute trading losses allowable under mercantile accounting. Forward contracts being binding and enforceable, losses due to adverse exchange fluctuations on balance sheet date were deductible. Premium account expenditure representing difference between forward and spot rates also allowed as business expenditure. Case-Laws Income Tax Tue, 30 Apr 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=752289