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2014 (4) TMI 163 - AT - Income TaxDisallowance on account of mark to market loss – Foreign exchange contracts – Held that:- The decision in CIT v/s Woodward Governor India P. Ltd. [2009 (4) TMI 4 - SUPREME COURT] followed - the loss suffered by the assessee is on revenue account towards foreign exchange difference as on the date of balance sheet and is an item of expenditure deductible u/s 37(1) - an enterprise has to report outstanding liability relating to import of raw material using closing rate of foreign exchange and any difference, loss or gain, arising on conversion of said liability at closing rate should be recognized in profit and loss account for reporting period - unrealized loss due to foreign exchange fluctuation in foreign currency transactions on revenue item as on the last date of the accounting year is deductible - thus, order of the CIT(A) set aside and the AO is directed to allow the loss claimed by the assessee on account of marked to market loss on foreign exchange contract – Decided in favour of Assessee. Disallowance of write off of 1/10th of non-compete fee – Held that:- As decided in assessee’s own case for the previous assessment years that there was no merit in the ground raised by the assessee – Decided against Assessee.
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