Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 1529 - ITAT CHENNAIScrutiny assessment t u/s.143(3) r.w.s.144 - findings of the CIT(A) that order passed u/s.144 is not tenable - HELD THAT:- The grievance with the Department is justified. When CIT(A) takes decision against the Department, he should have called for a remand report from the AO for which he fails to do so. Accordingly, we vacate the findings of the CIT(A) on this issue. Thus, this issue would go back to the file of AO for fresh consideration after giving due opportunity to the assessee. Appeal of Revenue is partly allowed for statistical purposes. Forex fluctuation loss - Claim of exchange loss on forward contracts - As per revenue assessee has hedged the export proceeds receivable much more than what is available in stock as receivables therefore, falling within the ambit of speculative transactions - HELD THAT:- As decided in M/S. AISHWARYA & CO. P. LTD., [2015 (9) TMI 8 - ITAT CHENNAI] AO has to consider the foreign exchange derivative in proportion to export turnover as regular business transaction of the assessee. If the derivative transaction undertaken by the assessee is in excess of export turnover then that loss suffered in respect of that portion of excess transaction has to be considered as speculative loss only and that excess derivative transaction has no proximity with export turnover and the AO is directed to compute accordingly. AO has to see whether there is any premature cancellation of forward contract of foreign exchange and that transaction should be taken out for the purpose of considering the business loss and only the transactions which are completed to be considered for the purpose of determining the business loss from these foreign exchange forward contract. With this observation, we remand this issue to the file of the Assessing Officer for fresh consideration. Appeal of assessee is partly allowed for statistical purposes.
|