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2010 (6) TMI 668 - HC - Income TaxWhether Tribunal was justified in granting relief u/s. 80HHC on the issue of gain on forward currency contract without appreciating the fact that the gain on exchange difference is nothing but speculation profit and not related to the business of the assessee ? - Whether Tribunal was justified in directing AO not to exclude this income from the profits eligible for deduction U/s. 80HHC without appreciating that when the assessee enters into a forward contract assessee stands to benefit by the fluctuations in foreign exchange irrespective of the fact whether the trade agreement exists or not ? - Held that:- Tribunal after appreciating the evidence on record and the submissions advanced on behalf of the respective parties, has given sufficient, cogent and convincing reasons for holding that the the transaction in question was not a speculative transaction and that the foreign exchange contract was entered into by the assessee only with a view to realize the amount due on sale of goods. In the circumstances, no infirmity is found in the reasoning adopted by the Tribunal in holding that the gain on forward currency contract is related to the business of the assessee. In the circumstances, no question of law can be stated to arise qua the said ground. Whether the Appellate Tribunal was justified in granting relief to assessee without appreciating the fact that the provisions/liability written off and shown as income of the year was not earned during the year and was duly considered while working out the deduction U/s.80HHC in the relevant A.Y. in which such expenditure/creditors existed ? - Held that:- Commissioner (Appeals) found that writing back of provisions/liability for expenses payable was merely a reversal of liabilities created in the previous year as a result of which manufacturing profit of the previous year got reduced. Accordingly, it should also be treated as part of manufacturing profits eligible for deduction under section 80HHC. The Tribunal upon appreciating the evidence on record has concurred with the findings recorded by Commissioner (Appeals). Thus, in light of the concurrent findings of fact recorded by Commissioner (Appeals) and the Tribunal, no question of law can be stated to arise, as proposed or otherwise, in relation to the said ground.
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