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2014 (6) TMI 333 - ITAT MUMBAIDisallowance of claim of unrealized foreign exchange loss – Held that:- Following CIT Versus M/s Woodward Governor India P. Ltd. & M/s Honda Siel Power Products Ltd. [2009 (4) TMI 4 - SUPREME COURT] – loss suffered by the Assessee in respect of a revenue liability, on account of exchange difference as on the date of Balance Sheet, is an item of expenditure allowable u/s 37(1) in the year of accrual - the assessee has been following the accounting system consistently and the same is in accordance with the AS-11 issued by the ICAI – thus, there is no reason to interfere with the order of the CIT(A) – Decided against Revenue. Disallowance of interest u/s 14A of the Act – Held that:- Following CIT Vs. Deepak Mittal [2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT] - the onus is placed upon the assessee to prove the quantum of expenditure incurred on earning of tax free income of dividend - as per the provisions of sub. sec (2) of sec. 14A of the Act, the AO is required to examine the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income and if he is not satisfied with the correctness of claim only, he can proceed to determine the amount of expenditure in terms of sec. 14A(2) of the Act - the AO is required to proceed further to collect materials or evidence to determine expenditure, if any, incurred by the assessee – thus, the matter is required to be remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
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