TMI Blog2019 (6) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned transaction is representing the unascertained liabilities ? - The assessee created such provision in respect of the current liabilities represented in foreign currency at the end of the financial, i.e. 31st March 2013 based on the rate of currency prevailing at the relevant time. Therefore, we are of the considered opinion that such liabilities cannot be treated as unascertained liabilities. Referring to case M/S WOODWARD GOVERNOR INDIA P. LTD. M/S HONDA SIEL POWER PRODUCTS LTD. [ 2009 (4) TMI 4 - SUPREME COURT] it is clear that the trading liability arising on account of currency fluctuation is ascertained liability, and therefore, it is eligible for deduction. Assessee has been adjusting the books of accounts consis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77;11,61,18,652.00 on account of the deduction claimed by the assessee for the provision of foreign currency exchange. 2. Briefly stated facts are that the assessee in the present case is a private limited company and engaged in the business of Imports, Exports, and manufacturing of Diamonds, Precious Semi Precious Stones. The assessee in the year under consideration has claimed provision for the exchange difference in respect of import of the goods amounting to ₹11,61,18,652.00 only. However, the AO was of the view that the assessee is not eligible for deduction such amount for the two reasons. Firstly, the deduction for the provisions relating to the import of goods on account of exchange fluctuation is available only on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such provision in respect of the current liabilities represented in foreign currency at the end of the financial, i.e. 31st March 2013 based on the rate of currency prevailing at the relevant time. Therefore, we are of the considered opinion that such liabilities cannot be treated as unascertained liabilities. 5.2 We also note that the Hon ble Apex court involving identical facts and circumstances in the case of CIT versus Woodward Governor India Private Ltd. reported in 312 ITR 254 has held as under: 15. For the reasons given hereinabove, we hold that, in the present case, the loss suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure under section 37(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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