Thursday, September 15, 2011

LOSS ARISING ON YEAR-END VALUATION OF AN INTEREST RATE SWAP ALLOWABLE AS A DEDUCTION - ITAT MUMBAI

When anticipated profits on un matured contracts are held to be non-taxable, there is no good reason as to why anticipated losses on un matured contracts can be taken into account while computing business income. There is an inherent fallacy in this approach inasmuch as anticipated losses and anticipated profits are not treated in the same manner in the computation of business profits. These dual standards in recognizing anticipated losses and anticipated profits are accepted accounting norms.

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