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2016 (7) TMI 693 - AT - Income TaxEligibility for deduction u/s. 80IB - exchange rate difference - CIT(A) has allowed the claim of deduction u/s. 80IB heavily relying upon the decision of Amba Impex [2005 (12) TMI 58 - GUJARAT High Court ] - Held that:- In the light of the aforementioned decision of the Hon’ble High Court, we find that there is clear dissimilarity of the facts in as much as in the case of the assessee, the gain has arisen out of the hedging made by the assessee. The assessee has entered into a forward contract and has been benefitted by the fluctuations in foreign exchange irrespective of the fact whether trade agreement exists or not. In other words, the exchange rate fluctuation gain does not have any first degree nexus with the export sales of the assessee. In the absence of the first degree nexus the ratio laid down by the Hon’ble Supreme Court in the case of Liberty India [2009 (8) TMI 63 - SUPREME COURT ] squarely apply. Since the ld. CIT(A) has decided the issue in favour of the assessee, heavily relying upon the decision of Amba Impex (supra) and since we have substantively distinguished the facts of the case in hand with the facts of the case before the Hon’ble High Court (supra). We set aside the findings of the ld. CIT(A) and restore that of the A.O. - Decided in favour of revenue Allowability of depreciation on plant - Held that:- CIT(A) was of the opinion that there is a merit in the case of the assessee. The plant and machineries were used during the year and, therefore, eligible for depreciation and accordingly directed the A.O. to allow the depreciation as per the law. As before us, the ld. D.R. could not bring any cogent material evidence on record to controvert the findings of the ld. CIT(A), as the findings of the ld. CIT(A) are based on the verification of direct evidences, we decline to interfere. - Decided in favour of assessee
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