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2018 (7) TMI 2081 - AT - Income TaxLoss on foreign exchange currency forward contracts entered - Whether it is speculative in nature? - whether assessee company failed to discharge the onus cast upon it by the statute to prove that the transactions in question were not of a speculative nature and thus the case of the assessee was not covered by proviso (a) of Section 43(5) ? - HELD THAT:- As the facts and circumstances during the year under consideration are same, respectfully following the decision of the Tribunal in assessee’s own case, wherein Tribunal have held that cancellation of foreign exchange contract is a business loss and not a speculation loss, we do not find any infirmity in the order of CIT(A) for allowing assessee’s claim of business loss. TP Adjustment - whether when TNMM requires only broad comparability and not product identity, CIT(A) was not justified in accepting product dissimilarity claim to reject? - HELD THAT:- As per the finding of CIT(A) it is apparent that assessee is manufacturing diamond studded jewellery having an average of gold content of 40% and the comparable adopted by the TPO and GECL has negligible gold content of about 1.10%. Accordingly, CIT(A) was justified in rejecting GECL which was not comparable with the assessee on account of product dissimilarity. Fresh facts have been contended before the learned CIT(A), without giving opportunity to the A.O./TPO - HELD THAT:- As gone through the orders of the authorities below and observed that ground of appeal does not point out to any particular facts, which are not there before the A.O/TPO. Further, we are into the analysis of segmented accounts of corporate entity as available in public domain. It was on this basis that the TPO set off comparables undertaken by the assessee and was analyzed by the A.O/TPO and was available before the CIT(A). Therefore, there is no possibility of fresh facts being considered by the First Appellate Authority. The ground of appeal is dismissed. Deduction u/s.10A is allowable before giving effect to provisions of Section 70 & 71 - HELD THAT:- This issue has been decided by the Hon'ble Bombay High Court in the case of CIT v. Black and Veatch Consulting Pvt. Ltd [2012 (4) TMI 450 - BOMBAY HIGH COURT] held that the deduction u/s. 10A has to be given effect to at the stage of computing the profits and gains of the business, which is anterior, that is prior to applicable sections for set off of business losses, Section 72 of the Act. Therefore, the deduction has to be computed before setting off of unabsorbed losses. In view of the above, we do not find any infirmity in the order of CIT(A) for allowing claim of deduction u/s.10A before giving effect to the provisions of Section 70 and 71 of the IT Act. Appeal of the Revenue is dismissed.
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