Unrealised loss on outstanding interest rate swaps would be allowable as business deduction

In brief :-In a recent ruling, the Mumbai Income-tax Appellate Tribunal (the “Tribunal”) in the case of J P Morgan Chase Bank Vs. ADIT [2010-T11-185-ITAT-DEL-INTL, held that unrealized loss on outstanding interest rate swap transactions at year end would be allowed as a deduction, when the assessee had been following the same method of accounting consistently in accordance with the mandatory requirement under the Reserve Bank of India (the “RBI”) guidelines. Facts •  The assessee had debited to the profit and loss account a certain amount as loss incurred on revaluat...