TMI Blog2010 (10) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee availed the loan and for every year whether the assessee was claiming deduction whenever exchange rate fluctuation was adverse to them. If the practice adopted by the assessee is correct, then whenever exchange rate fluctuation goes to reduce the rupee liability of the loan, the same should be taken as income of the relevant year - Matter requires reconsideration by the AO. Depreciation disallowed by AO for the reason that machinery itself is installed on 31.3.2002 - Held that:- The assessee obviously procured the machinery from manufacturer and machinery of this value will certainly involve installation with all integrated facilities, trial run and commissioning. Even assuming that keeping the machinery ready for use itself is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r services rendered outside India and so much so, no TDS was called for required no interference. - ITA. No. 1382 of 2009 - - - Dated:- 1-10-2010 - C.N. Ramachandran Nair, K. Surendra Mohan, JJ. Jose Joseph, SC, For Income Tax for the Petitioner P. Balakrishnan (E) for the Respondent JUDGMENT Ramachandran Nair, J 1. This is an appeal filed by the revenue under Section 260A of the Income Tax Act against the orders of the Tribunal on various questions raised in the appeal. We have heard senior counsel appearing for the revenue and Sri. P. Balakrishnan, counsel appearing for the respondent- assessee. 2. The first question raised pertains to assessee's claim for deduction of exchange rate fluctuation on the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. We therefore set aside the orders of the tribunal and that of the lower authorities and remand the matter to the assessing officer for fresh consideration after giving an opportunity to the assessee to produce accounts for previous and subsequent years and after verifying the assessment records of those years. If the assessee has followed uniform practice of debiting and crediting the profit and loss account with variation in exchange rate fluctuation, then deduction should be allowed for this year, if the exchange rate fluctuation has caused increase in rupee liability of the loan account. 3. The next question raised pertains to assessee's claim of deduction of depreciation which was disallowed by the assessing officer for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commissioning were done which is possible only after trial run. Since none of the authorities has considered these matters, we allow the appeal on this issue and set aside the orders of the first appellate authority and that of the Tribunal and even assessment and remand the matter to the assessing officer to reconsider the same with documentary evidence about the transport, installation, trial run and commissioning of the machinery. If the machinery was not put to use in regular production, then the assessing officer will consider whether the judgment above referred will entitle the assessee for deduction based on findings of facts on the issues stated above. 4. The next ground pertains to assessee's entitlement for deduction of amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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