Gain on Cancellation of Forward Contract is Capital Receipt: ITAT Delhi

Dalmia Bharat Ltd. Vs DCIT (ITAT Delhi) These were cross appeals by both the Assessee & Revenue against the order of CIT(A). Assessee, engaged in manufacture of cement, refractories & sponge iron, had raised multiple issues. The first issue related to gain of Rs.92.05 lakhs on cancellation of a forward contract entered with UTI Bank for import of cement plant machinery from Germany. Assessee treated it as capital receipt reducing the cost of machinery in AY 2009-10, whereas AO treated it as speculative business income u/s 43(5) & CIT(A) held it as revenue receipt. Tribunal held th...