9911796707
TMI Blog2020 (10) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments cited by the learned AR are for the period before insertion of this proviso and hence, not relevant. Hence, there is no merit in these grounds of the assessee and therefore, rejected. Disallowance of Forex Loss - HELD THAT:- Tribunal [ 2020 (3) TMI 113 - ITAT BANGALORE] decided similar issue in favour of the assessee by following the judgment of Hon ble Apex Court rendered in the case of Woodward Governor India Pvt. Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] - revenue could not point out any difference in facts in the present year as compared to these two years for which the tribunal order is available. Regarding the applicability of section 43A, we find that this is stated by the AO in the assessment order itself that this section is not applicable - being final fact finding authority, we made efforts to examine the facts and found that although there was import of capital assets in those years when ECB loans were borrowed but there was substantial exports also and the assertion of the assessee is this that such export proceeds were used for import of capital assets and ECB loan was not used for that purpose and the learned DR of the revenue could not bring any ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue as per Ground No. 2 in both years. 4. Regarding Ground Nos. 3 to 5 in both years raised by the revenue in respect of deletion of disallowance of ₹ 77,97,732/- in A. Y. 2011 12 and ₹ 136,64,024/- in A. Y. 2012 13 being the project expenses capitalised by the AO but deleted by CIT (A), he placed reliance on the tribunal order rendered in assessee s own case for A. Y. 2013 14 2014 15 in ITA Nos. 3040 3041/Bang/2018 dated 24.02.2020 and submitted that copy of this tribunal order is available on pages 108 to 152 of the paper book. He submitted that as per Para 9.9.1 of this tribunal order, the issue involved in Ground Nos. 3 to 5 in both years was decided by the tribunal in favour of the assessee. 4. Regarding Ground No. 6 in both years in respect of interest incurred on borrowed funds on account of Capital Work in Progress, he pointed out that on pages 12 and 13 of written submissions dated 13.03.2018 filed by the assessee before tribunal, it is pointed out that in A. Y. 2010 11 in ITA No. 1501 1586/Bang/2013 r.w. M. P. No. 211 212/Bang/2017, the tribunal in para 20 of its order has decided similar issue against the assessee in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e F. Y. 2006 07, an amount of ₹ 244,16,467/- was incurred on import of Capital Goods and it was pointed out that this amount is also disclosed by the assessee in Note No. 12 (a) of the Audited Accounts for the year ended as on 31.03.2007 enclosed with the written submissions. It is also submitted that during the F. Y. 2009 10, an amount of ₹ 492,85,853/- was incurred on import of Capital Goods in and it was pointed out that this amount is also disclosed by the assessee in Note No. 20.5 of the Audited Accounts for the year ended as on 31.03.2010 enclosed with the written submissions. It is also submitted that during the F. Y. 2010 11, an amount of ₹ 1091,92,389/- was incurred on import of Capital Goods in and it was pointed out that this amount is also disclosed by the assessee in Note No. 20.4 of the Audited Accounts for the year ended as on 31.03.2011 enclosed with the written submissions. Hence, it is seen that this is admitted by the learned AR of the assessee that at least an amount of ₹ 19,15,69,903/- was incurred on import of Capital Goods in F. Y. 2005 06, 2006 07, 2009 10 and 2010 11. But this is also submitted in the same written su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely succeeding years i.e. A. Y. 2013 14 2014 15, we find no reason to consider any other judicial pronouncement and respectfully following the tribunal orders in assessee s own case for immediately preceding year i.e. A. Y. 2010 11 and immediately succeeding years i.e. A. Y. 2013 14 2014 15, we reverse the order of CIT (A) on this issue in both years and restore that of the AO and accordingly, Ground Nos. 6 in both years is allowed. 9. Regarding the issue involved in Ground No. 7 in A. Y. 2012 13 in respect of order of learned CIT (A) in deleting the disallowance made by the AO of ₹ 39,32,28,754/- being Forex Loss by holding that the judgment of Hon ble Apex Court rendered in the case of Woodward Governor India Pvt. Ltd., 312 ITR 254 is not applicable in this regard, we find that in para 8.5 on page 17 of the assessment order, the AO has observed that the issue involved is loss or gain on reinstatement of capital loans not falling within the ambit of section 43A and has also observed that the issue involved is about forex losses on ECB loans which were utilised for acquiring machinery in India and not abroad. Finally, in para 8.8 on page 18 of the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing rate and the balance amount is incurred on actual payment made during the year. In the assessment year 2014-2015, ₹ 25.55 crore represent notional forex loss as above and balance amount is incurred on actual payment during the year. The Assessing Officer except making bald assertion that the transactions were undertaken on account of capital items no evidence was brought on record to establish that the foreign currency transactions were undertaken on capital items. The Supreme Court in the case of CIT vs. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254 had already held that the actual payment was not a condition precedent for making adjustment in respect of foreign currency transactions at the end of the closing year. We are, therefore, unable to concur or agree with the view of the Assessing Officer that liability could arise only when the contract would have matured as such a stand is totally divorced from the accounting principles and is in variance with the principle upheld by the Apex Court in the case of Woodward Governor India Pvt. Ltd. (supra). It is also not in dispute that assessee is following the mercantile system of accounting consistently. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
