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2014 (8) TMI 1129 - AT - Income TaxDisallowance being marked to market losses on account of exchange rate fluctuation - Held that:- The Hon’ble Supreme Court in the case of Woodward Governor India (2009 (4) TMI 4 - SUPREME COURT) has held that loss suffered by the assessee on account of fluctuation in the rate of foreign exchange as on the date of the balance sheet is an item of expenditure u/s. 37(1) of the Act. Respectfully following the decision of the Hon’ble Supreme Court, the AO is directed to delete the disallowance. Ground No. 1 is accordingly allowed. Disallowance of expenditure u/s. 14A read with Rule 8D - Held that:- AO has not referred to the balance sheet figures of the assessee. The AO has also not given any findings whether the borrowed funds were also used for making the investments. The AO has also not considered the claim of the assessee that the investments have been made out of own funds. In the interest of justice, in our considered opinion, this issue needs to be readjudicated afresh. We, accordingly set aside this issue to the file of the AO. The AO is directed to show that the assessee has actually incurred certain expenditure for earning the exempt income considering the facts and the figures of the balance sheet of the assessee. The assessee is directed to file necessary details before the AO. This ground of the assessee is allowed for statistical purpose.
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