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2017 (5) TMI 677 - AT - Income TaxAddition on account of the alleged pre-operative expenses - Held that:- Only ground of disallowance of these expenses is on the ground that they relate to the period prior to the commencement of the business by the assessee.The sum and substance of the decisions as relied upon by assessee is that the company had to file various statements and returns and has to perform various functions to retain its status as a company and had to incur certain expenditure, and such expenditure is allowable as deduction. - Decided against revenue Addition on gain due to fluctuation in foreign exchange - Held that:- There is a clear finding by the learned Commissioner of Income-tax (Appeals) that the loans were taken in foreign exchange for construction of plant and the foreign exchange gain was the result of revaluation of loan liability for capital expenditure which is a realised gain. He further recorded that no plant and machinery were acquired by the assessee during the year under consideration as such the learned Commissioner of Income-tax (Appeals) relied upon the decision reported in CIT v. Jagatjit Industries Limited (2009 (9) TMI 62 - DELHI HIGH COURT). In this decision, it is clearly held that the entire gain due to the fluctuation in foreign exchange when the source of funds was for capital expenditure, is a capital receipt. This judgment is applicable to the facts of the case on hand and following the same, we find no legal infirmity in the finding of the learned Commissioner of Income-tax (Appeals). - Decided against revenue
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