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2014 (4) TMI 856 - HC - Income TaxNature of Liability – Contingent or not – Loss of fluctuation of foreign exchange - Whether the Tribunal was right in holding that loss arising out of fluctuation in foreign exchange for restatement liabilities is not the contingent liability is valid in law – Held that:- The decision in Oil and Natural Gas Corporation Ltd., vs. Commissioner of Income Tax [2010 (3) TMI 81 - SUPREME COURT] followed - the assessee was entitled to adjust the actual cost of imported assets claimed in foreign currency on account of fluctuation in the rate of exchange at each of the relevant balance-sheet dates, pending actual payment of the liability u/s 43A - the loss claimed on revenue account was allowable u/s 37(1) and the assessee was entitled to adjust the actual cost acquired in foreign exchange in terms of Section 43A - the restatement of the liability itself came at the end of the accounting year on account of the foreign exchange rate fluctuation and thereby the assessee was stated to have been saddled with the loss arising out of the restatement of the liability - the restatement had come at the end of the accounting year and that the present liability itself was on account of the exchange fluctuation – Decided against Revenue.
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