Assessee was a Singapore based bank registered in India as FII. It took loan in foreign currency to invest in debentures. To safeguard itself from foreign exchange fluctuation risk it entered into forward contracts. Before selling debentures, it terminated forward contracts on which it earned profit. It was held that gain arising from early settlement of foreign exchange forward contract was not income from other sources but had to be treated as capital gain exempt under Article 13 of DTAA. (A.Ys. 1998‐99 & 2005‐06)
Citicorp Investment Bank (Singapore) Ltd. v. Dy. DIT (2012) 54 SOT 119(Mum)(Trib.)
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