Special Bench of ITAT on taxability of loss in case of forward foreign exchange contracts

Citation : IN THE CASE OF: DCIT Vs. Bank of Bahrain & Kuwait, APPEAL NO: ITA No. 4404 & 1883/Mum/2004, DECIDED ON August 13, 2010

Brief:- Where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract.