Allowability of expenses
This query is : Resolved
CA Sanjay Baheti
(Querist)
28 July 2012
Please confirm whether Hedging Loss suffered on Forex Transactions can be allowable as expenditure or not as per I.T.Act or Rules made there under so far in case of Pvt Ltd Co. engaged in Manufacturing activities.
If yes then under which Specific section of I.T.Act & Also if any case law is available then quote the same.
Please Reply soonest.
If yes then under which Specific section of I.T.Act & Also if any case law is available then quote the same.
Please Reply soonest.
Amol S Joglekar
(Expert)
02 August 2012
No specific section available. The point you have raised is very very TRICKY. How? If it hedge... how can ther be LOSS would be the first question put forth by any man of ordinary prudence. The moment you start advocating, he/she will conclude that you have used HEDGE as speculative profit earmning vehicle. The hedge loss can be claimed under esiduary head. Refer the annual report of L&T.
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