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2019 (10) TMI 1537 - AT - Income TaxOperating income for the purpose of PLI - Exclusion of loss on foreign exchange fluctuation from the operating expenditure - HELD THAT:- D.R. very fairly submitted that this Tribunal in the case of Infac India Pvt. Ltd [2018 (10) TMI 1814 - ITAT CHENNAI] found that the profit or loss due to foreign exchange fluctuation has to be excluded from operating income for the purpose of PLI. In view of the decision of co-ordinate Bench of this Tribunal, the loss on account of foreign exchange fluctuation in this case has to be excluded from operating expenditure. Accordingly, the orders of both the authorities below are set aside and the Assessing Officer is directed to exclude the foreign exchange fluctuation from operating income / expenditure. Adjustment of working capital for determining the arm's length price - CIT(Appeals) confirmed the order of the Assessing Officer on the ground that the assessee has not filed any material to establish that it is operating in an environment of negative working capital - HELD THAT:- From the material available on record it appears that the assessee has filed the material to indicate / establish the working capital involved in the functioning of the assessee. In those circumstances, this Tribunal is of the considered opinion that it may not be correct to say that the assessee has not submitted relevant facts before the CIT(Appeals). Therefore, the matter needs to be remitted back for re-examination. Accordingly, orders of both the authorities below are set aside and the issue of working capital adjustment is remitted back to the file of the CIT(Appeals). CIT(Appeals) shall examine the material filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee. The assessee is also at liberty to file necessary material once again before the CIT(Appeals) so that the working capital adjustment can be made. Non-consideration of miscellaneous income - Assessee submitted that amount is part of Other Income and operating in nature - HELD THAT:- When the assessee has raised a specific ground, this Tribunal is of the considered opinion that the CIT(Appeals) is expected to dispose the same in accordance with law. Since such an exercise was not done by the CIT(Appeals), this Tribunal is of the considered opinion that the matter has to be considered by the CIT(Appeals). Accordingly, the issue in respect of other income is remitted back to the file of the CIT(Appeals) for consideration. Appeal filed by the assessee is allowed.
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