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2013 (8) TMI 1015 - ITAT MUMBAINature of loss - speculation loss u/s 43(5) v/s non-speculation loss - Held that:- The ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of A.O. We order accordingly and direct him to decide this issue afresh as per law in the light of the afore-noted Tribunal order. We want to make it clear that the issue is left open to be decided by the Assessing Officer. The applicability of the Tribunal order in the case of Arnav Akshay Mehta [2012 (9) TMI 447 - ITAT MUMBAI] should be considered by the Assessing Officer as per law and facts of the instant case. He will also dealt with the assessee’s contention on the applicability of proviso (a) to section 43(5) if the case is found to be falling in proviso (d) to section 43(5). Without prejudice ground taken by the assessee about the direction to the Assessing Officer to allow set off of the alleged speculation loss against profit arising to the assessee in similar transaction in subsequent year, is clearly not acceptable because firstly we have not upheld the view of the Revenue in treating the loss of ₹ 1.99 crore as speculation and secondly subsequent assessment year is not before us. Disallowance on account of exchange rate fluctuation - Held that:- The Hon’ble Supreme Court in the case of CIT v. Woodward Governor [2009 (4) TMI 4 - SUPREME COURT ] has held that loss suffered by the assessee in respect of fluctuation in the rate of foreign exchange as on the date of the balance sheet is an item of expenditure u/s 37(1) in the year of approval. It is relevant to note that apart from claiming deduction for ₹ 62.62 lakh, the assessee offered income of ₹ 34.37 lakh in respect of gain on foreign exchange fluctuation with refernce to the rate of purchase and sale transaction entered during the year, which has been duly accepted as taxable by the authorities below. In such a situation and respectfully following the precedent rendered by the Hon’ble Supreme Court, we are of the considered opinion that the assessee deserves deduction of ₹ 62.62 lakh.
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