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2016 (12) TMI 405 - ITAT HYDERABADForeign exchange gain - eligibility for exemption u/s 10A - AO observed that the gain is from reinstatement of balance in EEFC A/c - Held that:- The export turnover is always brought into India by way of foreign exchange deposited into the EEFC A/c. The assessee has kept the foreign exchange in the EEFC A/c as it did not require the same immediately for its business purposes. By virtue of the deposits remaining in the EEFC A/c, the assessee has gained on the foreign exchange fluctuation. Merely because the sale consideration is retained in the bank a/c, it will not lose the character of being export consideration. The gain is on a/c of conversion of foreign exchange. We find that similar issue had arisen in the case of Banyan Chemicals Ltd. before a third Member Bench reported in (2008 (12) TMI 296 - ITAT AHMEDABAD ). Thus we hold that the forex gain as on the date of deposit into EEFC A/c only is part of the export turnover Gain on account of the forward contracts has been held to be in the nature of the business income eligible for deduction u/s 10A of the Act. See Majestic Exports vs. JCIT [2015 (7) TMI 936 - ITAT CHENNAI ] Amount received from its AE towards the reimbursement of the expenditure - ALP adjustment - Held that:- Having regard to the rival contentions and the material on record, we find that the reimbursement of the expenditure by the AE to the assessee is also on international transaction. The TPO u/s 92CA of the Act, has not made any ALP adjustment to the reimbursement of expenditure which only shows that the genuineness of the transaction has been accepted. When there is no impact on the profit of the assessee by the said transaction, we agree with the contention of the assessee that it does not have any impact on the computation of income of the assessee. Levy of interest u/s 234A - Held that:- As assessee submitted that in the relevant A.Y, the CBDT has extended the time for filing of the returns till 15.11.2011 and the assessee had filed its return of income on 13.11.2011 itself and therefore, the interests u/s 234A of the Act is not chargeable. Since these facts need verification, we deem it fit and proper to remit the issue to the file of the AO for verification of the details and direct the AO to charge interest u/s 234A of the Act only if there is a delay in filing of the return of income inspite of extension of time by the CBDT. This ground is therefore, allowed for statistical purposes.
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