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2013 (11) TMI 408 - AT - Income TaxDisallowance u/s 36 - Interest expenditure - proportionate disallowance on the ground that possession of the premises had not been handed over to the assessee till the end of the AY - assessee contended that he has used interest free funds for purchase of property - Held that:- neither before the AO nor before the FAA assessee had proved that interest free funds were given out of appellant’s own funds out of internal accruals. - AO and FAA had rightly disallowed the interest payment. But, we are of the opinion that there is need for recalculating the exact amount of interest disallowance. Matter is restored back for recalculation of interest disallowance - Decided against the assessee. Market to market loss - loss on account of Exchange rate fluctuation - of outstanding debtors and creditors for sale and purchase of foreign currency - speculative transaction or not - Held that:- assessee was not dealing in Foreign Exchange, therefore transactions entered into by it in Foreign Exchange cannot be held to be hedging transactions. Assessee is dealing in diamonds and FC entered into only for diamonds would have been covered by the proviso (a) to the section 43(5)of the Act. As held by the Hon’ble High Court of Calcutta in the matter of Gourepore Co. Ltd.(1980 (11) TMI 23 - CALCUTTA High Court) onus was on the assessee to prove that the transactions in question were not of a speculative nature. We are of the opinion that the assessee has failed to discharge the onus cast upon him by the statute. - Decided against assessee.
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