Case Law Details
Bechtel India Pvt. Ltd. Vs ACIT (ITAT Delhi)
Hedging forward contracts of foreign currency cannot be marked to market (MTM) on balance sheet date as already there is a underlying asset and there is no extra outgo for settlement of the forward contract other than already determined in the contract and thus there is no additional liability or benefit to the assessee on the settlement date. Once there is no liability or benefit on the settlement date, there is no possibility of liability or benefit to the assessee on balance sheet date also.
Full Text of the ITAT Order is as follows:-
This appeal by the assessee is directed against the order of the assessing officer dated 27-1-2017 for assessment year 2009-10. The Income-Tax Appellate Tribunal (in short ‘the Tribunal’) in its order dated 14-10-2015 for the year under consideration, in ITA No. 882 /Del/2014, restored the issue of “marked to market” (MTM) losses on forward contracts for afresh adjudication to the learned “Dispute Resolution Panel (in short ‘the DRP’). The learned DRP in compliance to the direction of the Tribunal issued direction to the assessing officer on 30-12-2006. In pursuant to the direction of the learned DRP, the assessing officer passed the impugned order in terms of section 254/143 (3) read with section 144C of the Income Tax Act,1961 (in short ‘the Act’). Grounds of appeal are reproduced as under:
“Following grounds of appeal are independent of, and without prejudice, to each other:
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