2015 (5) TMI 38

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....p;         "1. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that "Mark to Market" loss of Rs. 13,85,718 arising on valuation of forward exchange contracts on the closing date of accounting year is not a notional loss and, therefore, allowable." 2. The assessee is engaged in the business of manufacturing and trading of diamonds. The Assessing Officer, during the course of assessment proceedings, noted that the assessee has debited sum of Rs. 13,85,718 as losses on account of outstanding / open foreign exchange forward contracts. Before the Assessing Officer, it was explained that these losses are on account of Mark to Market revaluation of t....

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....f decisions of the co-ordinate bench of the Tribunal. Strong reliance was placed on the latest decision of the Tribunal, Mumbai Bench, in London Star Diamond Co. India Pvt. Ltd. v/s DCIT, ITA no.6169/Mum./2012, order dated 11th October 2013. The relevant conclusion of the Tribunal is as under:-              "35. x x x x (a) Loss on cancellation of Matured FCs amounting to Rs. 4,14,88,805 relates to the FCs cancelled or terminated on or after the due date. In other words, the FCs booked as integral part of the export invoices lived its booking period in full and they were either terminated by the Bank on or after due date of maturity date of the contract as the actual realization w....