ARASKA DIAMOND PVT. LTD. Vs. ACIT

JUDGEMENT

(1.) CHALLENGING the order dt. 09.07.2012 of the CIT(A) -9, Mumbai, assessee -company has raised following Grounds of Appeal:

(2.) Assessee -company, engaged in the business of trading of cut and polished diamonds, filed its return of income on 26.09.2009 declaring loss at Rs. 2,19,91,359/ -.Assessing officer(AO) finalised the assessment u/s. 143(3) of the Act, on 29.12.2011, determining the total income of Rs. 78,57,190/ -.

(3.) Aggrieved by the order of the AO, the assessee filed an appeal before the First Appellate Authority (FAA).After considering the submissions of the assessee and the assessment order he held that the it had claimed loss of Rs. 2,98,48,551/ - on account of forward exchange contracts, that the assessee was not a dealer in foreign exchange, that it was an importer -exporter of diamonds, that the assessee had cancelled relevant forward contracts of foreign exchange, that not a single forward contract was settled by actual delivery. Referring to the provisions of section 73 and 43(5) of the Act, he defined the term speculation loss. He also made a reference to the cases of Seksaria Riswan Sugar Factory( : 121 ITR 196) Budge Investment Co. Ltd. (73 ITR 722) and Davenport & Co. (P) Ltd. ( : 100 ITR 715).