Dismissing the appeal of the revenue the Court held that the assessee was not a dealer in foreign exchange, but was an exporter of cotton. Therefore, the Tribunal rightly took note of the transaction done by the assessee where, in order to hedge against losses, the assessee booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for the export of cotton in some cases failed and therefore, the assessee was entitled to claim deduction in respect of the amount as business loss. Therefore, the Tribunal was right in holding that the loss incurred on account of cancellation of forward contracts was not speculative losses falling within the provisions of section 43(5) of the Act. (AY. 2011-12)