TMI Blog2015 (9) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7329/Mum/2013) - - - Dated:- 31-7-2015 - Ms. Sushma Chowla and Shri N.K. Billaiya, JJ. For The Revenue Shri G.M. Doss For The Assessee Shri K. Shivaram and Shri Rahul R. Sarda ORDER PER Sushma Chowla, J.M. These two appeals filed by the Revenue are against the consolidated order of the CIT(A) dated 16.09.2013 relating to assessment years 2009-10 and 2010-11 against the order passed under section 143(3) of the Act. The assessee has field cross objections against the appeal filed by the Revenue relating to assessment year 2010-11 against the order passed under section 143(3) of the Act. Both the appeals filed by the Revenue relating to the same assessee and the cross objections filed by the assessee on similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue pointed out that the facts of the present case are at variance, i.e. the AO had noted that there were pending contracts which had not concluded and as such the ratio of the earlier decision were not applicable. Another objection raised by the learned D.R. was that contrary view has been taken by the Mumbai Benches of the Tribunal in the case of M/s. Vinod Kumar Diamonds Pvt. Ltd. in ITA No. 506/Mum/2013 dated 03.05.2013. 5. The learned A.R. for the assessee, in rejoinder, pointed out that the assessee has consistently offered profit from foreign exchange differences in the earlier and later years to tax. Our attention was drawn to the order of the CIT(A) at page 26 and it was pointed out that only in the year under consideration ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from exposure on account of foreign exchange rates it had entered into forward contract to hedge against the risk of fluctuations in foreign currency rates. The said transaction of entering into forward contracts was claimed by the assessee to be an integral part and incidental to export business undertaken by the assessee. The said contracts for purchase and sale of foreign currency were monitored under various regulations issued by the RBI and assessee was permitted to enter into forward exchange contracts because of its export activity. Assessee was revaluing all the monitory assets and liabilities outstanding at the end of the year following AS-11 and recognizing the profit/loss during the year. It may be noted that for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io laid down by the Apex Court in the case of Woodward Governor India Pvt. Ltd. (supra) the claim of the assessee was allowed by the CIT(A), against which the Revenue is in appeal. 8. We find that the issue arising in the present appeal, i.e. loss on account of forward contract entered into by the assessee to hedge against the loss arising on account of fluctuations in foreign exchange arose before the Tribunal in a series of cases. The learned A.R. for the assessee placed reliance upon the following decisions of different Benches: i) ACIT vs. M/s. Monarch Gems ITA No. 2613/Mum/2013 dated 09.07.2014 ii) ACIT vs. M/s. Vimal Export ITA No. 6610/Mum/2012 dated 08.01.2014 iii) ACIT vs. M/s. Rupam Impex ITA No. 4008/Mum/2012 iv) ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract as on 18th January, 1998, on which the rate of dollar is ₹ 42. Further suppose that the contract is to mature on 30th April at the price of ₹ 46 per dollar. Suppose at the end of the year 31st March, the rate of dollar has gone up to ₹ 43, the assessee s claim is that the difference of ₹ 1 (Rs. 43 -42) as on 31st March, 1998 should be taken as loss and allowed deduction accordingly. The Special Bench of the Tribunal in the case of Dv. CIT (International Taxation) v. Bank of Bah rain Kuwait [2010] 41 SOT 290 (Mum.) has held that the loss incurred by the assessee on account of evaluation of the contract on the last day of the accounting year i.e. before the date of maturity of the forward contract, is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal raised by the Revenue are thus dismissed. 11. The learned D.R. for the Revenue had placed reliance on M/s. Vinod Kumar Diamonds Pvt. Ltd. (supra). The said decision is contrary to the view taken in Badridas Gauridu P. Ltd. 261 ITR 256 (Bom). We find no merit in the said reliance. Allowing the claim of the assessee, we dismiss the grounds of appeal raised by the Revenue. 12. The issue in ITA No. 7329/Mum/2013 is identical to the issue in ITA No. 7328/Mum/2013 and our decision in ITA No. 7328/Mum/2013 applies mutatis mutants to the issue in ITA No. 7329/Mum/2013. 13. Now coming to the cross objections filed by the assessee, the learned A.R. for the assessee submitted that the same may be dismissed. In view of our dismissing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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