TMI Blog2014 (5) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... rings into debit an expenditure for which a legal liability has been incurred before it is actually disbursed - the assessment years being prior to the amendment in Section 43A of the Act with effect from 1st April, 2003 the Assessee would be entitled to adjust the actual cost of the imported capital assets, acquired in foreign currency, on account of fluctuation in the rate of exchange at each of the relevant balance sheet dates pending actual payment of the varied liability – thus, the notice is set aside – Decided in favour of Assessee. - Special Civil Application No. 954 of 2004 - - - Dated:- 23-4-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Petitioner : Mr. Manish J. Saha and J. P. Shah For the Respondent : Mrs. Mauna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to Revenue Account was not backed by the actual remittance and loss arisen due to fluctuation on the first and last day of accounting year the allowance of exchange loss as a deduction in the computation of the business income has resulted in underassessment. In view of the above I am of the firm belief that substantial income has escaped assessment within the meaning of Section 147, for which assessments need to be reopened. 2.3. The petitioner raised objections to the process of reopening under communication dated 7.8.2003. Such objections were rejected by the Assessing Officer by order dated 15.9.2003. Hence this petition. 3. We may also notice that on 31.3.2003, the Assessing Officer recorded further reasons titled as suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case where a return which is accepted under section 143(3) of the Act without scrutiny, to reopen the same the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment, is not done away with. It was observed as under: 13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is wrongly referred to in the reasons recorded as para 5(B) of the annual report of the company, the correct reference would be to para 5(C) where there is a reference to a sum of Rs.116.86 lakhs which was charged by the assessee to the revenue account. In that context, the question is whether the Assessing Officer s belief that the income chargeable to tax has escaped assessment, is valid. He formed such belief on the premise that the assessee had claimed deduction of such sum on mere fluctuation of the rate of foreign exchange and the loss computed was without actual remittances. In this context, the Supreme Court in case of Woodward Governor India P. Ltd.(supra) held that the loss suffered by the assessee on account of fluctuation in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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