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2015 (5) TMI 269 - BOMBAY HIGH COURTDisallowance of claim of interest payment - interest-free advances made to sister concern - Held that:- Neither the Revenue led any evidence to show how the borrowed funds were utilized by BBPL or the appellant given an opportunity to establish the need of the funds by BBPL for the benefit of appellant-Assesses. In the above view, we set aside the order of the Tribunal disallowing payment of interest to the extent of ₹ 17.27 lakhs and restore the issue to the Tribunal for fresh consideration. It is made clear that the Tribunal would also consider the decision of the Apex Court in S.A. Builders Ltd. (2004 (5) TMI 50 - PUNJAB AND HARYANA High Court ) to decide its applicability to the present facts after letting the parties before it an opportunity to produce evidence in support of their respective cases - Decided in favour of assessee for statistical purposes. Actual loss incurred due to fluctuation in currency rates disallowed - advance received from a foreign buyer and demurrage payable to a foreign buyer - Held that:- Claiming of revenue loss on account of foreign exchange rate fluctuation, is an allowable expenditure on the date of making its balance sheet. This revenue loss is not to be postponed to a future date when the transaction gets crystalised either by performance and/or cancellation of the contract. This is so agreed, as the issue now stands covered by Apex Court decision in Commissioner of Income Tax V/s. Woodward Governor India P. Ltd. reported in (2009 (4) TMI 4 - SUPREME COURT ). Therefore, in view of the above, the impugned order dated 8.8.2007 with regard to question (B) is also set aside. However, the issue is restored to the Tribunal for deciding the quantum of loss on account of foreign exchange fluctuation which is to be allowed to the appellant-Assesse under Section 37 of the Act on the facts of this case. - Decided in favour of assessee.
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