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TMI Blog2013 (1) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... estions of law:- "i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the disallowances of Rs.28,45,951/- made on account of provisions made towards ageing of inventory of work in progress and finished goods? ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the disallowances made on account of depreciation at Rs.1,47,876/- claimed on amount capitalized on account of foreign exchange fluctuation for increase in cost of liability due to capitalization of foreign exchange rate fluctuations when section 43A of the IT Act was not applicable to the facts of the case? 2. Briefly, the facts as narrated in the appeal may be noticed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -03. The assessee filed cross objections for sustenance of the above disallowances. The Tribunal allowed the cross objections of the assessee and dismissed the appeal of the department. Hence the revenue is before this Court through the present appeal. 3. Learned counsel for the revenue did not dispute that Question No.(ii) stands concluded against the revenue by the Apex Court decision in Woodward Governor India P. Limited,'s case (supra). Accordingly, the said question is answered against the revenue and in favour of the assessee. It is held that the assessee was entitled to capitalize on account of foreign exchange fluctuation for increase in cost of the asset due to fluctuations of foreign exchange rate and accordingly claim depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dards. Reference is drawn to Schedule 10 which shows the increase/decrease in stock which is part of the trading stock. A perusal of this Schedule will show that the amount of devaluation of Rs.28,45,951/- has been reflected in the Schedule by reducing the difference between the opening and closing stock and taking the balance to the Profit and Loss account. On the contra side the debit had to be made to the Profit and Loss account as an extra-ordinary item arising out of the devaluation/depreciation of the inventory. The fact that Rs.28,45,951/- was reflected separately in the Profit and Loss account was only because of the presentation. The amount could have easily been shown in the Profit and Loss account against Schedule 10 at a figu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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