TMI Blog2018 (4) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant by : Shri Pradeep Dinodia, R.K. Kapur, CA Respondent by : Shri Amit Jain, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal has been preferred by the department against the order dated 30.06.2014 passed by the Ld. CIT(A)-VIII, Delhi for assessment year 2009-10 wherein vide the impugned order, the Ld. Commissioner of Income Tax(A) has deleted the disallowance of notional foreign exchange loss of ₹ 56,16,520/-. The grounds raised by the department are as under:- 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 56,19,996/- made by the assessing officer by disallowing the notional loss on account of foreign exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On appeal by the assessee, this disallowance was deleted by the Ld. Commissioner of Income Tax (A). Now, the department is before the ITAT challenging the said deletion. 3. The Ld. Departmental Representative submitted that even as per the admittance of the assessee, the said loss was a notional loss which was booked by the assessee on the restatement of liability. It was submitted that the same had been rightly disallowed by the Assessing Officer as the same did not occur during the period under consideration. It was submitted that true profit or loss could be arrived at only on the final settlement of the contract and not during the period when the contract remained un-concluded. It was also submitted that the final liability/loss wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t date could not extinguish the liability and render it notional or contingent. Even if liability was discharged at a future date, it would nevertheless be a liability which was certain and not contingent. The main ingredient of a contingent liability was that it depends upon the happening of a certain event. The change in the value of foreign currency in relation to Indian currency was a fait accompli and not a notional one. Therefore the increase in liability due to foreign exchange fluctuation as per the exchange rate prevailing on the last date of financial year was allowable as a deduction and was not notional or contingent. 5.1 Therefore, respectfully following the ratio of the judgment as laid down by the Hon ble Delhi High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
