ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 1 1, CHENNAI vs. JAIN RESOURCE RECYCLING LIMITED, CHENNAI

ITA 1684/CHNY/2026Status: DisposedITAT Chennai06 August 2026AY 2023-249 pages
AI SummaryDismissed

What were the facts?

The assessee company adjusted unrealized Mark to Market (MTM) gains on derivative contracts in its computation of income. The Assessing Officer (AO) disallowed this adjustment, treating it as taxable income. The Commissioner of Income Tax (Appeals) deleted the addition made by the AO.

What did the Tribunal hold?

The Tribunal held that unrealized MTM gains on forward contracts, as per ICDS VI and Section 43AA of the Income Tax Act, are recognized only at the time of settlement and not merely because they are accounted for in the books as per AS-11. Therefore, the addition made by the AO was incorrect.

What were the issues?

Whether unrealized Mark to Market (MTM) gains on derivative contracts are taxable at the time of recognition in books or at the time of settlement, considering the provisions of Section 43AA and ICDS VI.

Which sections of the Income-tax Act were involved?

Section 43AA,Section 145(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI GEORGE GEORGE K & MS. PADMAVATHY.S

PER PADMAVATHY.S, A.M: These appeals by the Revenue are against the separate orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 01.10.2025 for Assessment Year (AY) 2022- 23

The order continues below.

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