The AO disallowed the loss against a forward contract entered into hedge the risk against foreign exchange fluctuations to cover exports and imports as speculative in nature , relying on the Instruction No 3/2010 dt. 23- 3 – 2010.  Tribunal allowed the claim . On appeal by Revenue  Dismissing the Court held that Loss arising on reinstatement of the forward cover purchase  contracts is  not speculative . CBDT Instructions and circulars which are contrary to law are not binding . Loss is allowable as revenue expenditure. ( AY. 2009 -10 )