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2017 (1) TMI 947 - AT - Income TaxLoss on exchange rate fluctuation - AO disallowing a loss resulting on account of fluctuation in foreign exchange rate on the closing date of the year under consideration, primarily on the ground that it was a contingent liability and notional in nature - Held that:- The aforesaid stand of the Assessing Officer is clearly in contrast to the decision of the Special Bench of the Tribunal in the case of Oil & Natural Gas Corporation Ltd. vs. DCIT (2002 (8) TMI 802 - ITAT DELHI). Moreover, the CIT(A) has also relied upon the judgment of the Hon’ble Supreme Court in the case Woodward Governor India Ltd.,(2007 (4) TMI 118 - DELHI HIGH COURT) to say that loss arising on reinstatement of foreign currency loss utilized for the purposes of business could not be construed as contingent or notional in nature. In the present case assessee is following mercantile system of accounting and under these situation, in our view, the CIT(A) made no mistake in treating such loss as revenue in nature. The other plea of the Assessing Officer that since loss related to raising of foreign currency loans for acquiring an asset, such loss on account of rate fluctuation should go to add to the cost of the asset in terms of section 43A of the Act is also not tenable. Quite clearly, section 43A of the Act deal with an asset acquired by the assessee “from a country outside India” and in the present case it has been found by the CIT(A) that the asset acquired by the assessee by utilizing the foreign currency loans was from within India. Therefore, the CIT(A) made no mistake in allowing the claim of the assessee - Decided in favour of assessee Determination of deduction under section 10A of the Act in relation to the STPI unit - Held that:- Having regard to the judgments of the Hon'ble Bombay High Court in the cases of Black And Veatch Consulting Pvt. Ltd. (2012 (4) TMI 450 - BOMBAY HIGH COURT ) and Techno Trap and Polymers Pvt. Ltd.(2015 (12) TMI 909 - BOMBAY HIGH COURT), we find no error on the part of the CIT(A) in directing the Assessing Officer to determine the deduction under section 10A of the Act before reducing the loss of the other unit. Thus, Revenue fails on this Ground also. - Decided in favour of assessee
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