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2019 (8) TMI 1449 - ITAT MUMBAIAssessment u/s 153A - HELD THAT:- AO can not disturb the completed and finalized assessment on the date of search which has attained finality. The AO has jurisdiction to disturb the assessment if the Department has seized some incriminating material qua the additions which are proposed to be made in the assessment framed u/s.143(3) r.w.s.153A of Act. However, in the present case, we find that there is no reference by the AO to any incriminating material found during search and therefore, we hold that the additions/adjustments/recomputations made by the AO in the assessment order are without jurisdiction and have to be deleted. The case of assessee is squarely covered by the decision of the Bombay High court in the case of CIT Vs. Continental Warehousing Corporation Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] as held that in the case of unabated assessment, the additions can only be made if based upon the incriminating materials found during search and not otherwise. We, therefore, respectfully following the decision of the jurisdictional High Court , set aside the order of CIT(A) and direct the AO to delete the adjustment or addition to that income. Loss on foreign currency forward contracts as speculation loss instead of business loss treated by the assessee - HELD THAT:- In order to hedge the foreign currency fluctuation, assessee enters into foreign exchange forward contracts through banks as per RBI norms and thus these transactions are entered into in the ordinary course of business of the assessee and are integral and inseparable part of its business. In view of these facts and circumstances, we are not in agreement with the conclusion of the Ld.CIT(A) that the loss suffered due to cancellation of these forward contracts in foreign exchange was a speculative loss. Moreover, the case of assessee is squarely covered by various decisions, referred above, wherein it was held that loss incurred due to cancellation of forward foreign currency contract in the ordinary course of business is a business loss and not a speculative loss. Hon'ble Bombay High Court in the case of CIT Vs. D.Chetan and Co., [2016 (10) TMI 629 - BOMBAY HIGH COURT] has held that – Transaction entered into in the regular course of business of hedging of transaction to cover various foreign exchange fluctuations is a business loss and not a speculative loss. Thus we hold that the loss incurred by assessee is a business loss and the AO is directed accordingly. This Ground of appeal raised by assessee is allowed. Computing deduction u/s.10A - other income which was inextricably linked with the business of assessee, was not taken into account - HELD THAT:- We find that the in the other income, there was an item of ₹ 70,46,376/- on account of Sundry Expenses written-off back during the year which were claimed in the earlier year and thus, it was claimed as part of the profit and consequently, the claimed u/s.10A of the Act however the AO rejected the deduction u/s 10A in respect of the same. Now the only issue before us whether the expenses written back in the current year which were credited to the profit and loss account would be eligible for the deduction u/s 10A of the Act. Undisputable, during the year when these expenses were written back by crediting the same to the income of the account of the assessee and the profits were increased correspondingly. We find merits in the arguments of the ld AR that in earlier years these expenses were claimed in the profit and loss account and the deduction u/s 10A was allowed accordingly and now when these are reversed , the same should be treated as part of the profits for the purpose of deduction u/s 10A. After taking into accounts the totality of the scenario, we are of the view that the same forms part of profit for the purpose of Section 10A of the Act. Accordingly, we set aside the order of CIT(A) and direct the AO to allow the deduction u/s.10A of the Act. Hence, this ground raised by assessee is allowed.
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