Loss from Hedging Contracts of Foreign Exchange is Normal Business Loss

M/s ITT Shipping Pvt. Ltd. Vs Pr. CIT (ITAT Kolkata) When the assessee is not dealer in foreign exchange and as a part of his normal business activity, enters into hedging contracts of foreign exchange, the loss in question is normal business loss and cannot be held a “Speculation Loss” as covered by Section 43(5) of the Act. The Vishakhapatnam Bench of the ITAT in the case of DCIT, Circle-1(2), vs. B Enterprise Pvt. Ltd. reported in (2017) 80 Taxman 362 (Vishakhapatnam Trib.) at para 16 and 17 held as follows: “16. The next issue that came up for our consideration for the assessment yea...