TMI Blog2012 (1) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 to 21-11-2010 Saturday and Sunday 22-11-2010 The papers were being processed for filing 23-11-2010 The papers are being filed for second appeal Within a span of one weak this office received 93 Appellate Orders from the office of ld.CIT(A) relating to several months batches apart from having 19 old Appellate Order of which Appeal Scrutiny reports are being prepared and sent to the office of C.I.T, Kol-II, Kolkata. Besides this, due to huge pendency of about 200 time barring cases to be completed by 31-12-2010 a delay occurred in sending papers for filing of appeal. That the delay is not deliberate and the respondent does not gain in any manner by delay committed. That there was sufficient causes for the delay and it is prayed that the same may be condoned. 2.1 After considering the averments made in the affidavit, and hearing both the parties, we are of the opinion that the revenue/department was prevented by reasonable cause from preferring the appeal within the stipulated period. We, accordingly, condone the delay in filing the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out during the year. The assessee, inter-alia, contended as under:- When export proceeds were realized the valuation of such foreign currency was translated at the rate of conversion applicable on the date of transaction. 6.1 However, the Assessing Officer disallowed the assessee s claim, inter-alia, by observing as under :- However, there was no export sale during the relevant period and therefore no question of export proceeds realization during the year. There was no domestic sale during the period either. Therefore, loss on conversation relates to foreign currency already accrued to the assessee during the earlier year. This year there is no export of tea. The loss is a notional loss on the amount standing in the foreign currency account of the assessee. 7. The learned Commissioner of Income-tax (Appeals) deleted the disallowance relying on the decision/order in the case of M/s. V.N Enterprises Ltd of his learned predecessor dated 02-02-2007 in Appeal No.194/CIT(A)-IV/06-07/C-4 for assessment year 2004-05 by observing as under:- 3.3 I have carefully considered the facts prevailing in the appellant s case and the submissions of the Ld. A/R and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count maintained by assessee with its bankers. The Assessing Officer held that it is not mandatory to keep deposit in foreign currency and loss is not attributable to the business of export. Accordingly, he disallowed. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee vide para 7 of his appellate order as under:- 7. 1 have considered the submissions of the Ld. A/R of the appellant and also gone through the assessment order. There is no dispute that the main business of the appellant-company was Export of Tea and the balance of foreign exchange in the EEFC A/c represented balance of the export proceeds which were trading receipts. It is also a fact that the foreign exchange balance in the EEFC A/c was valued at the close of even year at the prevailing conversion rate and the gain or loss arising from such conversion formed part of taxable income of the appellant from year to year. Merely because the appellant did not make any Exports during the year, the nature of the balance will not change because the company s business continued to be same as in the earlier years. I am therefore inclined to accept the submission of the Ld. A/R that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by him, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assesee on revenue account or as a trading asset or as part of circulating capital embarked in the business. But, if on the oilier hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature. We find that this issue is covered and particularly in the given facts and circumstances of the case, we uphold the order of CIT(A) and this issue of revenue s appeal is dismissed. 9. In the present case also assessee s contention was that the export of tea to Iraq was to the tune of ₹ 1.18 crores in the F.Y 2002-03, i.e in the. immediately preceding year. Then again there was export to the tune of ₹ 6.07 crores in the succeeding year also. However, there was no export of tea during the year under consideration. But the character of proceeds lying in EEFC A/c does not change. Thus, the facts are identical to the facts as obtaining in the case of said sister concern. Therefore, respectfully, following the tribunal order in the case of M/s. Tea Time Ltd (supra), this g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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