The High Court, following its earlier decisions, held that the mark‑to‑market loss on open equity stock future contracts was an ascertained liability and, therefore, was allowable as a business deduction, as the transaction was not speculative and was part of the regular course of business. Consequently, such loss was not required to be added back while computing book profits under section 115JB. (AY. 2008‑09)
PCIT v. DSP Merill Lynch Capital Ltd. [2022] 142 taxmann.com 579 (Bom.)(HC) Editorial : Affirmed in PCIT v. DSP Merill Lynch Capital Ltd. [2023] 294 Taxman 161/ 456 ITR 768 (SC)
S. 28(i) : Business loss-Mark‑to‑market loss on forward contracts-Ascertained liability-Allowable as business loss-Not speculative-Not required to be added back while computing book profits under section 115JB. [S. 43(5), 73]
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