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2018 (2) TMI 2027 - AT - Income TaxDisallowance of loss on account of foreign exchange fluctuation - addition stating that these expenditure have not been incurred by the assessee for the purposes of the business - CIT(A) allowed the claim of the assessee @50% of such claim holding that assessee has incurred such foreign exchange loss on account of loan for the purposes of the business - HELD THAT:- Revaluation of the foreign exchange liability is in accordance with accounting standard 11 issued by ICAI and the ld Assessing Officer has allowed 50% bank charges u/s 37(1). Hence, following the decision of the Hon'ble Supreme Court in CIT Vs. Woodward Governance India Pvt. Ltd [2009 (4) TMI 4 - SUPREME COURT] the allowed the claim of the assessee to the extent of 50%. He further held that looking to the facts on record and the true nature of transactions it cannot be said that the entire sum expended by the assessee are wholly and exclusively for the purposes of business. AR also could not show that the whole funds have been used for the business purposes. No such details were mentioned before the ld AO or before the ld CIT(A). While disallowing the bank charges to the extent of 50% vide order he has also mentioned that the reasons for the confirmation of disallowance is absence of complete details provided before the ld AO. DR also could not show us any reason that why such fluctuation is capital in nature. In view of this we do not find any infirmity in the order of the ld CIT(A) in allowing 50% foreign exchange losses holding that they are incurred for the purposes of the business. In the result appeal of the revenue raising the solitary ground is dismissed.
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