Assessee-company was engaged in business of energy and power generation.  It availed external commercial borrowings at rate of LIBOR+4.4 per cent to refinance its project. Assessee to hedge itself from fluctuation in interest rate entered into derivative contract in nature of interest rate swap with Standard Chartered Bank on which it incurred loss. It claimed  loss as business expenses/loss allowable as dedcution.  Assessing Officer held that mark to market loss on derivative instrument held by assessee as on balance sheet was not real but notional loss for reason that there was no actual transaction carried out by assessee. He disallowed mark to market loss on interest swap agreement. An identical issue came up before Tribunal in case of sister concern of assessee, wherein it was held that mark-to-market loss on SWAP contract was allowable where loans were converted into foreign currency loan to take benefit of low interest rate and loss recognized on account of foreign exchange fluctuation as per notified Accounting Standard 11 was an accrued and subsisting liability and not merely a contingent or hypothetical liability. Tribunal allowed the loss. High Court affirmed the order of the Tribunal. (AY. 2015-16,  2016-17)