https://www.taxtmi.com/caselaws?id=37127 Contracts for sale and delivery of sugar were treated as speculative transactions because they were ultimately settled without actual delivery, and the decisive test was settlement by delivery rather than any requirement of an initial purchase and reverse sale between the same parties. The assessee cancelled the contracts and discharged liability through cross-contracts and payment of differences, which brought the transactions within the statutory definition. Proviso (a) to Explanation 2 applied only to genuine hedging contracts entered into for raw materials or merchandise to guard against price fluctuations in contracts for actual delivery of goods manufactured or sold, and those conditions were not met. The loss was therefore not allowable as a normal business loss. en-us Mon, 05 Feb 1979 00:00:00 +0530 Fri, 26 Mar 2010 16:45:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37127 Contracts for sale and delivery of sugar were treated as speculative transactions because they were ultimately settled without actual delivery, and the decisive test was settlement by delivery rather than any requirement of an initial purchase and reverse sale between the same parties. The assessee cancelled the contracts and discharged liability through cross-contracts and payment of differences, which brought the transactions within the statutory definition. Proviso (a) to Explanation 2 applied only to genuine hedging contracts entered into for raw materials or merchandise to guard against price fluctuations in contracts for actual delivery of goods manufactured or sold, and those conditions were not met. The loss was therefore not allowable as a normal business loss. Case-Laws Income Tax Mon, 05 Feb 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37127