Unrealized MTM Gains on Forward Contract Not Taxable before maturity: Kerala HC

PCIT Vs Kalyan Jewellers India Ltd. (Kerala High Court) The case concerns the taxability of unrealized “mark-to-market” gains arising from forward contracts in commodity derivatives and whether such notional gains can be taxed before actual realization. The appeal was filed challenging the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, which had held that such unrealized gains are not taxable. The appellant contended that the assessee had included notional profits in its accounts arising from mark-to-market valuation of forward contracts, and therefore, such amounts shoul...