Assessee was incorporated in the United Kingdom and was registered in India as a Foreign Portfolio Investor and was engaged in investment activities. It entered into Forward Foreign Exchange Contracts (FCC) with a bank to hedge amounts invested by it in Indian securities. It incurred certain losses on rollover/cancellation of FCC and said loss was carried forward as a short-term capital loss. AO held that the loss in question was to be carried forward under head ‘income from other sources’. The ITAT relied on the decisions of Citicorp Investment Bank (Singapore) Ltd. v. Deputy DIT (International Taxation)-1(2) [2012] 24 taxmann.com 211/54 SOT 119 (Mumbai) & Dy. CIT v. D. B. International (Asia) Ltd. [2018] 96 taxmann.com 75 (Mumbai) and held that the loss in question was to be considered as short-term capital loss eligible for carry forward under the head ‘capital gains’. (AY. 2020-21)