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2018 (11) TMI 319 - AT - Income TaxLoss arising on revaluation of foreign exchange outstanding - allowable deduction - the said loss has not been routed through the books of account - year of assessment - Held that:- Assessee cannot be debarred from claiming a sum as deduction only for the reason that the assessee has failed to debit liabilities in its books of account. Unrealized loss due to foreign exchange fluctuation relating to trading assets and liabilities as on the last date of accounting year is allowable as deduction. See KEDARNATH JUTE MANUFACTURING COMPANY LIMITED VERSUS COMMISSIONER OF INCOME-TAX (CENTRAL), CALCUTTA [1971 (8) TMI 10 - SUPREME COURT] and CIT VERSUS M/S WOODWARD GOVERNOR INDIA P. LTD. & M/S HONDA SIEL POWER PRODUCTS LTD. [2009 (4) TMI 4 - SUPREME COURT] CIT(A) has relied upon the books of accounts of the succeeding year i.e. pertaining to A.Y. 2010-11, wherein the assessee has claimed to have accounted for this loss and after setting off this loss it has disclosed net profit of ₹ 301.55 lakhs as foreign exchange fluctuation gains. We noticed that these materials were not confronted to the Assessing Officer. Since the loss of ₹ 489.66 lakhs is held to be allowable in AY 2009-10, the same is liable to be disallowed in AY 2010- 11. Otherwise, it will lead to double deduction of same amount, which is not permitted under the Act. We notice that the Ld CIT(A) has not examined this aspect. Hence, for the limited purpose of examining these aspects, we restore this issue to the file of the Assessing Officer. The impugned claim of the assessee is to be allowed in the year under consideration. Since the details of entries passed in the year relevant to the AY 2010-11 need to be verified by the AO, we have restored this issue to the file of the AO for the limited purpose as stated in the earlier paragraph. - Decided against revenue
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