TMI Blog2012 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... lathi Shridharan for the Respondent. ORDER Rajendra Singh, Accountant Member These appeals by the assessee are directed against the orders dated 28.11.2008 and 27.12.2002 of CIT(A) for the Assessment Years 2005-06 and 1998-99. Since the dispute raised in both the cases are identical these are being disposed of by this single consolidated order for the sake of convenience. The identical dispute raised is regarding nature of income from settlement of the forward cover taken in foreign exchange. 2. Briefly stated facts of the case are that the assessee which is an investment bank and is tax resident of Singapore, had been registered in India as foreign institutional investor (FII) with SEBI. The assessee derived income from ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a foreign exchange contract could not exist without an underlying asset. It was argued that the investment in debt securities and forward contract were directly linked with the purchase and sale of debt securities. The assessee referred to several decisions of the Tribunal including the decision of the Special Bench in the case of Apollo Tyres Ltd. v. Asstt. CIT [2004] 89 ITD 235 (Delhi) (SB) in which it was held that gains arising on cancellation of forward transaction, which is dependent and inextricably linked to an underlying asset, would be revenue receipt or capital receipt depending upon whether the underlying asset was capital asset. Since in case of the assessee, the underlying asset i.e., debt security was admittedly a cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer treating the income as income from other sources in both the years. Aggrieved by the said orders, the assessee is in appeal before the Tribunal. 4. Before us the ld. AR for the assessee reiterated the submissions made before the lower authorities and pointed out that the same issue has already been considered by the Tribunal in case of sister concern of the assessee i.e. Citicorp Banking Corporation Behrain in Assessment Year 2005-06 [ITA No. 6525/M/09] and the issue has been decided in favour of the assessee. It was also submitted that the Assessing Officer himself in the assessment order passed u/s. 143(3) for Assessment Year 2007-08 held that loss arising on account of settlement of forward foreign exchange contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of Singapore law or regarding the fact whether money had gone to Singapore. Therefore, the fresh plea could not be admitted at this stage. 4.3 We have perused the records and considered the rival submissions carefully. The dispute is regarding nature of income arising from early settlement of forward foreign exchange contract. There is no dispute that the forward contract had been entered into by the assessee to safeguard the foreign exchange loan taken for purchase of debentures. There is also no dispute that debentures are capital assets and the income from sale of which has been treated as capital gain. The only dispute is regarding nature of income from the settlement of forward contract. We find that the same issue has alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that loss arising from settlement of forward contract taken by the assessee to safeguard the foreign exchange loan taken for acquisition of shares/debentures was capital loss. 4.4 The ld. DR has raised an additional plea that the assessee should be given benefit of DTAA only when it was proved that money had been sent to Singapore. But we find that no dispute has been raised by authorities below regarding money being transferred to Singapore nor any such issue is in dispute before us. No doubt the respondent can raise an additional plea for the first time before the Tribunal in support of order of CIT(A) but same should be based on facts already on record. The plea raised on the presumption that money may not have been transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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