Income arising on forward exchange contracts by an assessee engaged in the business of import / export must be treated as Business income and not Speculation income

It is not in dispute that the assessee is doing business of import and export of diamonds and it entered into forward exchange contract in respect of import and export transactions. On cancellation of the contract assessee is either entitled to profit or loss depending on rates contracted and rates prevailing at the time of cancellation. The assessee entered into these forward exchange contracts in order to protect against the fluctuation in the rate of foreign exchange currency. The assessee in this case made net gains in respect of foreign exchange contract export as the value of the rupee w...