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2023 (8) TMI 1071 - AT - Income TaxRevision u/s 263 - assessee had borrowed funds for construction of its hotel building and acquiring other fixed assets - As per CIT since the amount was borrowed in foreign currency for acquisition of certain capital assets, AO wrongly granted deduction in respect of such foreign exchange loss - HELD THAT:- The assessee is engaged in the business of running hotels at Pune and Nagpur. Certain amount of loan was taken in foreign currency for capital purposes. Loss on foreign exchange fluctuation in respect of such loan was claimed as deduction. The same could not have been allowed as deduction in terms of the judgment of Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] AO, without conducting any enquiry on this issue, finalized the assessment u/s. 143(3) and eventually allowed the deduction. In view of the fact that such foreign exchange fluctuation loss is not deductible as it pertains to loans taken for capital purposes, the AO by allowing deduction for this sum, passed an erroneous order which was prejudicial to the interest of the Revenue. In our considered opinion, no exception can be taken to the view canvassed by the ld. Pr.CIT in this regard. Decided against assessee.
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