2022 (11) TMI 848 - AT - Income Tax
Revision u/s 263 - assessee claimed an expenditure related to the expenditure incurred in foreign exchange towards “watch duty” - As per CIT part of the expenditure claimed by the assessee pertains to the A.Y.2013-14 and is not allowable for the year under consideration i.e.A.Y.2014-15 - HELD THAT:- In the instant case, the expenses claimed by the assessee are covered either by clause 5.3 or 6.1 of the agreement and therefore, the Ld.Pr.CIT has directed the Ld.AO to disallow the same. We are therefore of the considered view that the Ld.Pr.CIT has rightly directed the Ld.AO and find no infirmity in the order of the Ld.Pr.CIT and dismiss the ground raised by the assessee.
Disallowance of loss on foreign exchange rate fluctuation - HELD THAT:- We observe from the statement submitted by the Ld.AR that the difference in exchange rate was computed as on 31.03.2012 in comparison with exchange rate prevailing on 31.03.2014. It is evident from workings that the exchange loss has been calculated for two assessment years and claimed in the impugned assessment year. AO has therefore rightly considered the exchange loss arising for the impugned assessment year and has allowed the same while passing order u/s 154 of the Act.
Exchange loss for the F.Y.2012-13 cannot be claimed in the F.Y.2013-14, relevant to the A.Y.2014-15 u/s 37 of the Act, since it is considered as prior period expenses. We are therefore of the considered view that the Ld.AO has rightly allowed the exchange loss pertaining to the relevant assessment year and has disallowed the same pertaining to the previous assessment year. We, therefore, do not wish to interfere in the order of the Ld.AO on this ground and dismiss the ground raised by the assessee.