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TMI Blog2016 (5) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT(A) and therefore dismiss these grounds of appeal raised by revenue. See Woodword India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT ] - Decided in favour of assessee - I.T.A. No. 3907/Mum/2014 - - - Dated:- 6-4-2016 - SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : Shri Javed Akhtar For The Respondent : Shri Ramkrishna R. Dingsur ORDER Per Sandeep Gosain, J. M.: The Present Appeal has been filed by the revenue against the order of Commissioner of Income Tax (Appeals) - 34, dated 12.03.2014 for A.Y. 2009-10 whereby CIT(A) has allowed the appeal filed by the assessee against the order of AO dated 17.11.2011 on the grounds of appeal mentioned herein below. 1. On the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant craves leaves to amend or alter any ground or add a new ground. 2. The brief facts of the case are that the assessee firm is engaged in the business of import and export of cut and polished diamonds. This is the first year of its operation. The return of income declaring total income of ₹ 22,54,270/- was E-filed on 12.09.2009. The same was processed u/s 143(1) of the Act and thereafter the case was selected under CASS and notice u/s 143(2) of the Act was issued on 19.08.2010 which was duly served upon the assessee. After considering reply submitted by the assessee, assessment order dated 17.11.2011 was passed u/s 143(3) of the Income tax Act and total income of the assessee was computed. 3. Aggrieved by the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was also argued by ld. DR that since the assessee was not holding foreign currency and it was not at all utilized in the business therefore the loss on account of exchange fluctuation is not on revenue account. 4.2 On the contrary ld. AR representing the assessee relied upon the order dated 12.03.2014 and requested to dismiss Revenue s appeal. 5. We have heard counsels for both the parties and we have also perused the material placed on record and the orders passed by lower authorities. We have noticed that ld. CIT(A) while giving effect to the directions given by ITAT has considered the case and decided these issues. The operative para of CIT(A) while dealing with contentious issue is as under: During the course of appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After perusal of the records, it is found that the exchange difference was arisen on account of advances received from the customers and against the sale .realization and hence the transactions made by the appellant in foreign currency have been accounted in accordance with AS-11 issued by ICAI and therefore the loss on account of foreign exchange fluctuations is relatable to revenue account only. The Hon. ITAT has held in the order that if the loss is on account of revenue then appellant is entitled to the relief in view of the judgement of the Hon.Supreme Court in CIT vs. Woodword India Pvt. Ltd.312 ITR 254. In view of the above decision, the Assessing Officer is directed to delete the addition of ₹ 1,38,85,900/- towards loss on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counted for in accordance with AS-11 issued by ICAI and therefore the loss on account of foreign exchange fluctuations is relatable to revenue account only. The ld. CIT(A) while dealing with the issue and while passing the impugned order has kept in mind the principles laid down by the Supreme Court in the case of Woodword India Pvt. Ltd. 312 ITR 254 and has rightly directed the AO to delete the addition of ₹ 1,38,85,900/- towards loss on account of fluctuation of foreign exchange. 7. We, therefore, see no reason to interfere with the impugned order passed by the CIT(A) as he has rightly held that loss on account of fluctuation in foreign exchange rate on account of advances received from customers on account of sale realization is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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