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2022 (6) TMI 750 - ITAT CHENNAINature of loss - loss arising out of foreign currency term loan - revenue or capital loss - HELD THAT:- We have perused the case records and noted that foreign currency term loan sanctioned by the bank was by way of conversion of existing rupee term loan and that the FCTL was at concessional rate as compared to the rupee term loan leading to lower interest being debited in the profit & loss account. As the assessee has not represented nor made any submission before AO or before CIT(A) or in the statement of facts that in this year, the assessee has claimed forex loss and what is the treatment of any loss or gain arising in future years and whether the Department has accepted the same or not. These facts are not available on record and hence, we presume that the loan taken for purchase of machinery is rightly held by AO as capital loss. We affirm the findings of lower authorities on this issue. Depreciation at the appropriate rate by increasing the cost of the machinery - Alternate claim made by assessee is that in case, the effect is to be given for change in foreign exchange rates on FCTL, obtained by conversion of rupee term loan is considered to be a capital expenditure, the same ought to have been considered as the cost of asset purchased and depreciation should have been allowed on the cost of asset including this forex loss. We direct the AO to allow depreciation on this amount at an appropriate rate. Hence, this alternate claim of assessee is allowed.
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