TMI Blog2012 (1) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the reasons for delay, which is as under: 17.10.2010 to 07.11.2010 : Application for filing second appeal was not communicated. 08.11.2010 : Application for filing second appeal communicated. 09.11.2010 to 11.11.2010 : The papers were being processed for filing 12.11.2010 : The papers are being filed for second appeal. When this was pointed out, the Ld. Counsel fairly conceded the position. When Ld. Counsel conceded that there is reasonable cause, we admit the appeal and adjudicate the issue. 3. The first issue in this appeal of revenue is against the order of CIT(A) in deleting the addition of loss arising due to valuation of foreign currency balance in Exchange Earners Foreign Currency account. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no dispute that the main business of the appellant-company was Export of Tea and the balance of foreign exchange in the EEFC A/c represented balance of the export proceeds which were trading receipts. It is also a fact that the foreign exchange balance in the EEFC A/c was valued at the close of every year at the prevailing conversion rate and the gain or loss arising from such conversion formed part of taxable income of the appellant from year to year. Merely because the appellant did not make any Exports during the year, the nature of the balance will not change because the company s business continued to be same as in the earlier years. I am therefore inclined to accept the submission of the Ld. A/R that the loss arising due to v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation in Iraq and due to war with America. The assessee kept its export proceeds in foreign currency and continued the same in EEFC account. It was claimed that the assessee did not stop its business and continued its business in immediate succeeding assessment year2005-06, there was export to the tune of ₹ 20.35 cr. It was claimed that the assessee, whenever has made gains due to similar valuation in foreign exchange balance in EEFC Account, same was offered to tax and assessed by the Assessing Officer in earlier years but now, when the loss occurred, he cannot disallow. We find that Hon ble Apex Court in the case of Sutlej Cotton Mills Ltd. Vs. CIT (1979) 116 ITR 1 (SC) exactly on the issue of loss or gain of foreign currency as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant financial year, assessee could not continue its business whereas in earlier years and in succeeding years assessee is in continuous business and for that it has to maintain its establishment and also carry out operating expenses. Form the very beginning, it was claimed by the assessee that it was not stopped its business, neither closed it and once business is continuing, to maintain an establishment, it has to incur necessary expenses i.e. operating expenses. In view of this fact the CIT(A) vide para 9 of its appellate order allowed the claim of assessee as under: 9. I have considered the submissions of the A/R and gone through the assessment order. From the facts stated hereinabove it is manifest that the appellant cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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