https://www.taxtmi.com/caselaws?id=39651 Clause (a) of the third proviso to section 24(1) of the Indian Income-tax Act, 1922 protects only hedging contracts in respect of raw materials or merchandise entered into in the course of manufacturing or merchanting business to guard against loss from future price fluctuations on actual delivery sale contracts. Transactions lacking a direct nexus with such delivery contracts, or entered into to secure better prices and higher profit, do not fall within the proviso and remain speculative. On the facts, the assessee failed to prove the requisite connection for some items and failed to show anything more than profit-seeking dealings for the rest, so the losses were treated as speculative and deduction as business loss was denied. en-us Thu, 19 Apr 1973 00:00:00 +0530 Mon, 19 Apr 2010 14:59:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39651 Clause (a) of the third proviso to section 24(1) of the Indian Income-tax Act, 1922 protects only hedging contracts in respect of raw materials or merchandise entered into in the course of manufacturing or merchanting business to guard against loss from future price fluctuations on actual delivery sale contracts. Transactions lacking a direct nexus with such delivery contracts, or entered into to secure better prices and higher profit, do not fall within the proviso and remain speculative. On the facts, the assessee failed to prove the requisite connection for some items and failed to show anything more than profit-seeking dealings for the rest, so the losses were treated as speculative and deduction as business loss was denied. Case-Laws Income Tax Thu, 19 Apr 1973 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39651