Agra ITAT holds that losses arising to assessee-individual on account of trading in currency derivatives, neither speculative nor notional, allows set-off against other business income for AYs 2013-14 and 2014-15; Firstly, observes that derivative transactions entered by assessee meet all the conditions laid down under clause (d) of Sec. 43(5) and thus, qualify as transactions not deemed to be ‘speculative transactions’; Holds that CIT(A) erred in treating the entire loss as notional loss without looking at the position held by assessee at the close of the financial year, notes that only one series out of the 7 series of contracts remained unexpired as on the end of FY 2012-13 while all stood settled at the end of FY 2013-14; Further holds that CBDT instruction No 3/2010 which terms marked to market loss as notional, is not in accordance with law, observes that “though the reasoning of the Board to term the loss on account of ‘mark to market’ transactions, as contained in Instruction no. 3/2010, was disapproved by the Courts, it resurfaced in the ICDS”; Cites Delhi HC ruling in Chamber of Tax Consultants striking down ICDS I (to the extent it does not recognize expected losses and marked-to-market losses), HC had also held that non-acceptance of the concept of prudence in ICDS I is per se contrary to the provisions of the Act and therefore, cannot be countenanced:ITAT
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