“marked to market loss”

ICDS & AccountingICDS VIICDS VI49 judgments

The decision most relied on for marked to market loss is DCIT v. Bank of Bahrain & Kuwait (41 SOT 290), cited in 81 judgments on BharatTax.

Leading authorities on marked to market loss

DCIT v. Bank of Bahrain & Kuwait

41 SOT 290 · 2010 · ITAT

citing judgments

Mark-to-Market (MTM) losses on forward contracts and forex derivatives are allowable as a revenue deduction under Section 37(1) where a binding obligation is created against the assessee. This is provided the assessee consistently follows the same accounting method for both profits and losses.

Oil & Natural Gas Corpn. Ltd. v. Dy. CIT

83 ITD 151 · 2002 · ITAT

citing judgments

Fluctuations in foreign exchange currency, accounted for at the end of the accounting year using a consistent accounting system, are not notional losses and are therefore deductible. The loss accrues at the time of valuation, not solely upon remittance or repayment.

CIT v. D. Chetan & Co.

390 ITR 36 · 2017 · High Court

citing judgments

Losses on foreign exchange forward contracts are not speculative if they are entered into to cover variations in foreign exchange rates impacting import/export business. Such losses are considered business losses and not notional.

Indian Overseas Bank Ltd. v. CIT

246 ITR 206 · 2002 · High Court

citing judgments

Notional foreign exchange loss on unsettled forward contracts is not allowable as a deduction. The loss is allowable only upon settlement of the contract.

Reliance Industries Limited v. CIT

40 Taxmann.com 431 · 2013 · ITAT

citing judgments

Mark-to-market losses are allowable as deductions. The disallowance of such losses by the Assessing Officer is deleted.

Judgments citing marked to market loss

M/S Microland Ltd, Bangalore vs. Principal Commissioner of Income Tax, Bangalore

In the result appeal filed by assessee stands allowed

ITA 1669/BANG/2018[2014-15]Status: DisposedITAT Bangalore29 Jun 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2014-15 M/S. Microland Ltd., The Principal Micropolis, # 236, 92/1A, Commissioner Of Konappana Agrahara, Income Tax, Electronic City Phase – 1, Bangalore -4, Bangalore – 560 100. Bangalore. Vs. Pan: Aabcm2704P Appellant Respondent Assessee By : Shri B.K. Manjunath, Ca : Shri V.S. Chakrapani, Cit Revenue By Dr Date Of Hearing : 02-06-2022 Date Of Pronouncement : 29-06-2022 Order Per Beena Pillaipresent Appeal Has Been Filed By Assessing Against Order Dated 16/04/2018 Passed By The Ld.Pr.Cit, Under Section 263 Of The Act, For Assessment Year 2014-15 On Following Grounds Of Appeal: “1. That The Above Order Of The Commissioner Of Income Tax In So Far It Is Against The Assessee Is Against The Law, Facts, Circumstances, Natural Justice, Equity & All Other Known Principles Of Law. 2. The Cit Erred In Assuming Jurisdiction U/S 263 Without First Satisfying That The Assessment Order Suffered From An Error Which Is Prejudicial To Interest Of Revenue.

For Appellant: Shri B.K. Manjunath, CA

Section 142Section 143Section 143(1)Section 143(3)Section 263

following reasons: “1. As verified from assessment record it was seen that the assessee has debited Rs.1,02,93,910/- towards Forward Contract-mark to market loss vide Note-3.19/other expenses/Foreign exchange loss (including mark-to market losses) in the P & L account. This primafacie is a notional loss ... carried out any enquiry in respect of the notional loss that was debited amounting to ₹ 1,02,93,910/- towards forward contract being marked to market loss in the P&L account. 2.5 Various details were called for by the Ld.Pr.CIT and after considering the submissions, following view was taken

Edelweiss Commodities Services Ltd, Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, the appeal filed by the assessee is treated as allowed

ITA 7475/MUM/2017[2013-14]Status: DisposedITAT Mumbai24 Jun 2022AY 2013-14

Section 115JSection 143(3)Section 144CSection 14A

grounds of appeal and additional grounds of appeal urged by the assessee give rise to the following issues :- a) Disallowance of mark to market losses b) Disallowance made under section 14A of the Act c) Transfer pricing adjustment in respect of specified domestic transactions d) Validity of the assessment order ... aggrieved by the additions made by the Assessing Officer and accordingly preferred this appeal. 5. The first issue relates to disallowance of mark to market loss of Rs. 16.26 crore. The facts relating thereto are that the assessee had claimed deduction on account of provisions made for loss of currency

M/S Harman Connected Services Corporation India Pvt. Ltd., Bangalore vs. DCIT, Bangalore

In the result, the appeal of the assessee is treated as partly allowed for statistical purposes

ITA 705/BANG/2016[2011-12]Status: DisposedITAT Bangalore23 May 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.705/Bang/2016 Assessment Year : 2011-12 Dcit, M/S. Harman Connected Services Vs. Circle – 3(1)(2), Corporation India Private Limited, Bengaluru. (Formerly Known Symphony Teleca Corporation India Private Limited), Plot No.3 & 3A, Eoiz Industrial Area, Sy. No.85 & 86, Sadaramangala Village, Krishnarajapuram Hobli, Bengaluru – 560 066. Pan: Aabcg 5658 E Appellant Respondent Assessee By : Shri. T. Suryanarayana, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 22.02.2022 Date Of Pronouncement : 23.05.2022 O R D E R Per B. R. Baskaran:

For Appellant: Shri. T. Suryanarayana, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 10ASection 143(3)Section 40Section 40A

computer software, training and other consultancy services. The grounds urged by the assessee give rise to the following issues: (a) Disallowance of marked to market loss (MTM) (b) Disallowance of provision for legal and professional charges under section 40A of the Act. (c) Disallowance of depreciation under section ... above said issues only. Accordingly, the other issues are dismissed as not pressed. 4. The first issue relates to disallowance of marked to market losses. The assessee had claimed a sum of Rs.5,22,43,701/- as hedging loss relating to outstanding contracts. The AO disallowed the above said claim

M/S. Asia Power Projects Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result appeals filed by assessee as well as revenue stands allowed for statistical purposes

ITA 59/BANG/2017[2011-12]Status: DisposedITAT Bangalore07 Mar 2022AY 2011-12

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Asia Power Projects Pvt. The Deputy Ltd., Commissioner Of No. 6, Lakeside Residency, 4 Income Tax, Annaswamy Mudaliar Road, Circle – 11 (1), Bangalore – 560 042. Vs. Bangalore. Pan: Aadca0485B Appellant Respondent & Assessment Year : 2011-12 (By Revenue) : Shri Chavali Narayan, Ca & Assessee By Shri Keerthi Narayan, Ca : Shri Srinath Sadanala, Addl. Revenue By Cit (Dr) Date Of Hearing : 15-12-2021 Date Of Pronouncement : 07-03-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By Assessee As Well As Revenue Against The Order Dated 09.09.2016 Passed By The Ld.Cit(A)-1, Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal. “The Grounds Of Appeal Listed Below Are Without Prejudice To Each Other. 1. That The Order Of The Learned Deputy Commissioner Of Income-Tax (`A0') Dated 31 January 2014 & The Order

Section 115JSection 195Section 263Section 37Section 37(1)

revenue purposes whether could be allowed as a deduction u/s 37(1) and not adjudicated or decided the issue with respect to 'marked to market loss'. 4. The learned CIT(A) erred in deleting the addition of Rs.22,648,000/-made by the AO on account of Forex losses ... verified is; Whether the foreign exchange loss is a trading loss? and Page 9 of 16 ITA Nos. 59 & 211/Bang/2017 whether the mark to market losses are within the limits of the receivables, which is not discernible from the records? The Ld.CIT(A) has not verified these facts before allowing

Dy.Commissioner of Income Tax Circle-1(1)(1), Bangalore vs. M/S Asia Power Projects Private Limited, Bangalore

In the result appeals filed by assessee as well as revenue stands allowed for statistical purposes

ITA 211/BANG/2017[2011-12]Status: DisposedITAT Bangalore07 Mar 2022AY 2011-12

Section 115JSection 195Section 263Section 37Section 37(1)

Xchanging Solutions Limited, Bangalore vs. ITO, Bangalore

In the result, the appeals of the assessee are partly allowed and that of the revenue are dismissed

ITA 556/BANG/2016[2011-12]Status: DisposedITAT Bangalore19 Jan 2022AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Chandra Poojari

For Appellant: Shri Vikram Raghavan, AdvocateFor Respondent: Shri Arunkumar, CIT(DR)(TP)(ITAT), Bengaluru

Section 10ASection 10A(4)Section 143(3)Section 155

while holding that such payments are in the nature of royalty in terms of relevant provisions DTAA with Belgium and Singapore. Disallowance of Marked to market loss amounting to INR 29,08,450 9.1 The learned AO has erred in law and on facts, by holding that marked to market