The Tribunal held that when the derivatives are held as stock-in-trade, the mark to market loss on such derivatives is allowable, since such stock is valued on the principle of cost or market value whichever is lower. CBDT Circular no. 3/2010 not binding on the appellate authorities and that the same is going against the judgment of the Apex Court. (AY. 2011-12).
Edel Commodities Ltd. v. Dy. CIT (2018) 194 TTJ 86 (Mum.)(Trib.)
S. 28(i) : Business loss – Mark to market loss in derivative transactions – derivatives held as stock-in-trade – valued on the principle of cost or market value whichever is lower – Held, allowable.