Section 37: Mark to Market Loss due to Foreign Exchange Allowed

Kesoram Industries Ltd. Vs DCIT (ITAT Kolkata) The issue under consideration is whether the addition made by AO for ‘Mark to market’ Loss  on account of disallowance of loss on foreign exchange forward contract loss is justified in law? ITAT states that, the AO treated the loss arising on account of forward contracts in foreign currency which has not been settled in the year under consideration as notional loss. However the ld. CIT(A) allowed such loss having reliance on judgment of the Hon’ble Delhi High Court in the case CIT Vs Woodward Governor India Ltd. In rejoinder ld. DR stated t...