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2023 (7) TMI 342 - AT - Income TaxForex unrealized loss on account of Foreign Exchange - allowable deduction or not? - gain on Foreign Exchange fluctuation is taxable - assessee submitted that the transactions entered into foreign currency are required to be reported in Indian Rupees following the accounting treatment prescribed in the Accounting Standard-11 of ICAI and loss arising on account of difference in the Foreign Exchange rates prevailing on the date of transaction and the closing rate on the date of balance sheet (when the transaction is settled for the subsequent year) on account of restatement of outstanding loss for Revenue transactions on the balance sheet date is Revenue loss eligible for deduction u/s 37(1) as relying on Woodward Governor India Pvt. case [2009 (4) TMI 4 - SUPREME COURT] - HELD THAT:- We feel it appropriate to restore the issue to the file of the AO for examining the issue afresh taking into consideration all the facts and contentions of the assessee and to decide the issue in accordance with law after providing adequate opportunity of being heard to the assessee. Addition in respect of supplemental lease rent u/s 40(a)(i) - exemption u/s 10(15A) of the Act would not apply to supplemental rent/maintenance reserve - assessee contended that maintenance reserve is in the nature of supplemental rent paid by the assessee on monthly basis in addition to the basic lease rental for the aircraft and is part of lease rent - HELD THAT:- Tribunal [2023 (1) TMI 652 - ITAT DELHI] decided the issue in favour of the assessee holding that supplemental rent/maintenance reserve would be exempt from tax in the hands of lesser in India as per Section 10(15A) of the Act and hence, no disallowance u/s 40(a)(ia) can be made. Special Bench of the Delhi Tribunal in the case of Inter Globe Aviation Ltd. (Indigo) [2021 (9) TMI 1400 - ITAT DELHI] considered the lease rental pursuant to agreements executed after 01.04.2007 and its chargeability to tax in the hands of lesser under Article 12 of DTAA between India and Ireland and the Special Bench held that supplementary rent paid for lease agreements executed after 01.04.2007 are not chargeable to tax in India. Decided in favour of assessee. Disallowance on account of interest paid on late deposit of service tax and VAT u/s 37(1) - CIT(Appeals) deleted the disallowance - HELD THAT:- We observe that the disallowance was deleted on appreciation of facts and the evidences on record and also applying the decision of Sri Radha Krishna Shipping Ltd. [2019 (10) TMI 836 - ITAT MUMBAI] wherein it has been held that interest on account of delay in payment of service tax is allowable as deduction u/s 37(1) of the Act - Decided in favour of assessee.
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