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2023 (3) TMI 34 - AT - Income TaxDisallowance of swap contract loss - assessee during the year under consideration to refinance its project availed external commercial borrowing at the rate of LIBOR + 4.4% - AO held that mark to market loss on the derivative instrument held by the assessee as on balance sheet is not real but a notional loss for the reason that there was no actual transaction carried out by the assessee - assessee to hedge itself from the fluctuation interest rate entered into derivative contract in the nature of interest rate swap with Standard Chartered Bank on which assessee incurred loss - HELD THAT:- We note that identical issue came up before this tribunal in case of sister concern of the assessee namely Adani Petronet (Dahej) Port Pvt. Ltd for A.Y. 2011-12 [2022 (6) TMI 121 - ITAT AHMEDABAD] as relying on M/s. Adani Hazira Port Pvt. Ltd, [2022 (4) TMI 850 - ITAT AHMEDABAD] where the issue has been decided in favour of the assessee and against the Revenue as relying M2M loss on SWAP contract was allowable where loans were converted into foreign currency loan to take benefit of low interest rate and loss recognized on account of foreign exchange fluctuation as per notified Accounting Standard 11 was an accrued and subsisting liability and not merely a contingent or hypothetical liability. DR, on the other hand, has not been able to cite any judicial pronouncement in support of the Revenue’s case on this issue. We, therefore, find no infirmity in the impugned order of the CIT(A) allowing the claim of the assessee for deduction on account of Mark-to Market Exchange Loss in respect of Foreign Currency Derivatives Contracts and upholding the same, we dismiss of the Revenue’s appeal.
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