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2017 (3) TMI 966 - AT - Income TaxDisallowance of foreign exchange loss due to fluctuation - Held that:- The facts in the instant case are undisputed that that the instant loss is arising in respect to the forward contracts which had not expired on the last day of the accounting year. It is also not disputed that the assessee is following mercantile system of accounting which requires to account for all the expenses in the profit and loss account on accrual basis. Accordingly, the assessee has claimed the losses on the basis of mercantile system of accounting. Thus, in our considered view the assessee is very much eligible for the deduction of the impugned loss. See CIT Vs. Woodward Governor India (P) Ltd [2009 (4) TMI 4 - SUPREME COURT] Thus the losses which are arising due to the foreign exchange fluctuation should be accounted for in the books of accounts and accordingly the assessee is eligible to claim the deduction of such losses. - Decided in favour of assessee
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