Derivative contracts entered to hedge exchange risk cannot be treated as trading 

PCIT Vs Emmsons International Ltd. (Delhi High Court) Court is of the view that the same was not called for, as the said CBDT Circular No. 3/2010 dated 2nd March, 2010 has been issued in respect of loss on account of trading in foreign exchange derivatives. In the present case, however, the assessee had entered into derivative contracts in order to hedge its exchange risk in respect of export proceeds receivable by it in foreign exchange. Forward contracts entered into by the assessee were not by way of trading per se in foreign exchange derivatives. Consequently, CBDT Circular No. 3/2010 date...