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2012 (10) TMI 172 - AT - Income TaxLoss on exchange - sale of shares - capital or revenue - - Held that:- considering the order passed in Reliance Energy Limited. Versus DCIT, Special Range - 30, Mumbai [2005 (12) TMI 211 - ITAT BOMBAY-H ] the loss on foreign currency cannot said to have connection whatsoever with capital loss - loss suffered by the assessee on account of exchange difference as on the date of balance sheet is an item of expenditure allowable under section 37(1) of the Act. It is not notional and as per AS-11, if the accounts are maintained on mercantile basis the loss is allowable. - in favour of assessee. Income u/s 115JB - increased by being loss on exchange - Held that:- As the loss claimed by the assessee on diminution of foreign exchange is not notional loss and cannot be termed to be a provision, therefore, this ground of the assessee is also allowed. Excess dividend recovered by the assessee during the year which was not refunded to rightful owners - Income u/s 115JB increased by such amount - Held that:- it is only when there is a right to receive income, income can be said to have accrued. Without legally enforceable right there can be no accrual of income, thus as assessee has no lawful right to the receipt in question nor has it claimed such a right in such circumstances, the receipt will not assume the character of income in the hands of the assessee - decided in favour of assessee.
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