https://www.taxtmi.com/caselaws?id=795694 Gains from cancellation or early settlement of forward foreign exchange contracts used solely to hedge debt investments are taxable as capital gains rather than income from other sources. The contracts were inextricably linked to the underlying securities: foreign-exchange rules confined their value and tenor to the investment exposure and required unwinding when the securities were sold. In the absence of evidence of independent foreign-exchange trading, the hedges assumed the character of the underlying capital investments. Cancellation or settlement extinguished contractual rights and obligations, constituting a transfer of capital assets. Earlier decisions on identical facts remained applicable absent reversal or stay by a superior forum. en-us Wed, 08 Jul 2026 00:00:00 +0530 Sat, 25 Jul 2026 08:54:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=795694 Gains from cancellation or early settlement of forward foreign exchange contracts used solely to hedge debt investments are taxable as capital gains rather than income from other sources. The contracts were inextricably linked to the underlying securities: foreign-exchange rules confined their value and tenor to the investment exposure and required unwinding when the securities were sold. In the absence of evidence of independent foreign-exchange trading, the hedges assumed the character of the underlying capital investments. Cancellation or settlement extinguished contractual rights and obligations, constituting a transfer of capital assets. Earlier decisions on identical facts remained applicable absent reversal or stay by a superior forum. Case-Laws Income Tax Wed, 08 Jul 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=795694