Section 43(5) of the Income-tax Act, 1961 - Speculative transactions (Currencies)

IT : Provisions of section 43(5) do not apply to currencies and, therefore, loss incurred by assessee in currency swap contract cannot be denied to be set off against other heads of income taking it as speculative loss
IT : Where assessee company had entered into currency swap contracts for working capital loans which was pre-requisite for its business of export and import of commodities, loss incurred in said contract being in respect of circulating/working capital was an allowable expense under section 37(1)
■■■
[2015] 55 taxmann.com 375 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'A'
Adani Enterprises Ltd.
v.
Additional Commissioner of Income-tax, Range-1, Ahmedabad*
SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER
AND N.S. SAINI, ACCOUNTANT MEMBER
IT APPEAL NO. 1545 (AHD.) OF 2014
[ASSESSMENT YEAR 2008-09]
JANUARY  30, 2015
Section 43(5) of the Income-tax Act, 1961 - Speculative transactions (Currencies) - Assessment year 2008-09 - Whether provisions of section 43(5) do not apply to currencies and, therefore, loss incurred by assessee in currency swap contract cannot be denied to be set off against other heads of income taking it as speculative loss - Held, yes [Para 4.10] [In favour of assessee]
Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Currency swap loss) - Assessment year 2008-09 - Whether where assessee company had entered into currency swap contracts for working capital loans which was pre-requisite for its business of export and import of commodities, loss incurred in said contract being in respect of circulating/working capital was to be allowed under section 37(1) - Held, yes [Para 4.6] [In favour of assessee]