Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 624 - AT - Income TaxForex loss - allowable business loss u/s 37(1) or not? - Whether forex loss claimed by the assessee is not allowable as the said transaction is purely speculative in nature? - As submitted by the assessee, the AO allowed the assessee’s claim of forex losses in AYs 2006-07 and 2007-08 - HELD THAT:- In the AY 2008-09, the coordinate bench of this Tribunal dismissed the appeal of the revenue on low tax effect. We find substance on the submissions of the ld. AR. As is evident from the orders of authorities below, facts of the assessee’s case are similar with the AY 2008-09 wherein the assessee has entered into a master agreement (ISDA) with four banks and availed forex limits with these banks and claimed that these limits were utilized for hedging forex exposure in connection with import and export of raw sugar/white sugar. The assessee company has entered into transactions of buying and selling of forex and incurred a loss on the cancellation of the said contract and claimed the same as business loss and debited to P&L A/c as forex loss under the head ‘manufacturing administration expenditure’. Therefore, since the facts in AYs 2009-10 and 2010-11 are similar to the AY 2008-09. As per accounting standard AS-11, the assessee has rightly, claimed the forex loss as business loss u/s 37(1) - The losses claimed by the assessee are not speculative loss as alleged by the AO Assessment u/s 153A - incriminating documents were found during the course of search or not? - HELD THAT:- On perusal of the assessment order nowhere any seized material has been referred by the AO for computing the assessment and made addition only on the basis of the financial statements. Since no incriminating documents found during the course of search u/s 153A, no addition can be made.
|