TaxTMI 
TaxTMI 
2018 (5) TMI 1276
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....evenue herein is in appeal against the judgment of the Income Tax Appellate Tribunal raising following question for our consideration: "Whether the Appellate Tribunal is right in law in deleting the addition made by the AO on account of treating the loss from speculation business as against claimed by the assessee as hedging loss?" 2. Learned counsel for the Revenue pointed out that similar is....
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.... to foreign exchange fluctuation risks. To protect itself or at least to minimize the risk, the assessee enters into contract with the bank. The Assessing Officer was of the opinion that such hedging contract was speculative in nature and the expenditure incurred in the process was not allowable deduction. CIT (Appeals) as well as the Tribunal reversed this decision. 5. In somewhat similar situ....
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....Act as speculative transaction. It was observed as under: "The assessee was not a dealer in foreign exchange. The assessee was a cotton exporter. The assessee was an export house. Therefore, foreign exchange contracts were booked only as incidental to the assessee's regular course of business. The Tribunal has recorded a categorical finding to this effect in its order. The Assessing Officer....
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....with which we agree, in thecase of CIT v.Soorajmull Nagurmull(1981) 129 ITR 169." 7. Before the Calcutta High Court, the assessee was a firm engaged in the business of import and export of jute. In course of business, the assessee would enter into forward contract in foreign exchange in order to cover the loss which may arise due to difference in foreign exchange valuation. In one such contract....