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2014 (5) TMI 1037 - ITAT CHENNAIPenalty u/s 271(1)(c) - loss on account of currency fluctuation debited - Held that:- It is also true that the assessee has to evaluate the current position of such foreign exchange loan as on the last day of the previous year. If a liability is cast on the assessee on account of fluctuation in foreign exchange rate, the assessee has to provide for the same in its books of account. This is a mandatory provision for companies. The assessee has provided for such liability arising out of the currency fluctuation. In respect of such liability arising out of the currency fluctuation, treatment has to be given in two ways ; first, in respect of revenue items and second, in respect of capital items. In the present case, loss of RS.1,93,13,616 related to capital items and therefore, the said loss should have been added to the cost of assets acquired by the assessee utilising the foreign exchange loan as provided under section 43A. On the other hand, in its return, the assessee claimed this amount also as loss instead of claiming higher amount of depreciation. This is not a case of concealment of income or furnishing of inaccurate particulars. This is a case of a mistake or an oversight or at the best, a case of wrong claim. There is no scope to invoke section 271(1)(c) in the present case. - Decided in favour of assesse.
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