TMI Blog2010 (6) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record and the submissions advanced on behalf of the respective parties, has given sufficient, cogent and convincing reasons for holding that the the transaction in question was not a speculative transaction and that the foreign exchange contract was entered into by the assessee only with a view to realize the amount due on sale of goods. In the circumstances, no infirmity is found in the reasoning adopted by the Tribunal in holding that the gain on forward currency contract is related to the business of the assessee. In the circumstances, no question of law can be stated to arise qua the said ground. Whether the Appellate Tribunal was justified in granting relief to assessee without appreciating the fact that the provisions/liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of PF ESIC ? [B] Whether on the facts of the case and in law, the Appellate Tribunal was justified in granting relief u/s. 80HHC of the Act to assessee on the issue of gain on forward currency contract without appreciating the fact that the gain on exchange difference is nothing but speculation profit and not related to the business of the assessee ? [C] Whether on the facts of the case and in law, the Appellate Tribunal was in justified in directing the Assessing Officer not to exclude this income from the profits eligible for deduction U/s. 80HHC without appreciating the fact that when the assessee enters into a forward contract, as in this case, the assessee stands to benefit by the fluctuations in foreign exchange irrespective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction U/s. 80HHC of the Act ? [H] Whether on the facts and circumstances of the case and in law, the Tribunal was right in relying on the decisions of the Hon'ble Apex Court in the case of CIT Vs. Sudarshan Chemicals [2000] 245 ITR 769, CIT, Coimbatore Vs. Lakshmi Machines Works, 290 ITR 667 CIT Vs. Catapharma [India] P. Ltd. [2007] 292 ITR 641 [SC] without considering the fact that such decisions were pertaining to the assessment years prior to A.Y. 1999-00 and with effect from 01.04.99 [A.Y.1999-00], provisions of section 145A of the Act have been inserted as per which valuation of purchase and sale has to be made after adding tax, duty, cess or fee etc ? 2. The assessment year is 2004-2005 and the corresponding accounting peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the specific mention of the word 'charges' in sub clause (baa). That the exchange difference is received on account of difference in the exchange rate not only on the export but also on the import, as it pertains to the manufacturing business. It was contended that gain on cancellation of forward currency contract is also a kind of speculation profit. 7. In the impugned order the Tribunal has recorded thus: First of all it is noticed that in the case of foreign exchange realization, no incentive has been granted by any policy of the Government of India. The currency between two countries being different, the government of the respective countries manage payments on country to country basis. Reserve Bank is the administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The bank as only medium, is an administrative authority to facilitate the mechanism . 8.The Tribunal found that in the present case, the assessee company was a manufacturer exporter and had participated in the administrative mechanism provided by the Government of India through FEMA of 1999 in order to realize the amount due on sale of goods and was entitled to deduction under section 80HHC. Thus, the Tribunal after appreciating the evidence on record and the submissions advanced on behalf of the respective parties, has given sufficient, cogent and convincing reasons for holding that the the transaction in question was not a speculative transaction and that the foreign exchange contract was entered into by the assessee only with a vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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