TMI Blog2016 (7) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... (JM) For the Assessee : Shri Yogesh Thar For the Department : Shri B.S. Bist ORDER Per B.R. Baskaran, AM The appeal filed by the assessee is directed against the order dated 21.9.2010 passed by learned CIT(A)-27, Mumbai and it relates to A.Y. 2004-05. 2. The only issue urged in this appeal is to whether learned CIT(A) was justified in rejecting the claim for deduction u/s. 80HHC of the Act in respect of the gains arising on maturity of foreign contracts. 3. Learned counsel appearing for the assessee submitted that the assessee is a diamond exporter and it had entered into foreign exchange forward contracts in relation to specific export invoice. The assessee earned profits upon maturity of foreign exchange contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion rendered by Hon'ble Bombay High Court in the case of Shah Originals (supra) pertaining to gains realized on cancellation of contract. He submitted that, in the instant case, gains realised on maturity of forward contract hence the same is intricately linked with export activity. Accordingly he submitted that the assessee is entitled for deduction us/. 80HHC of the Act in respect of gains realised on foreign exchange forward contract. 7. We heard the rival contentions and perused the record. We notice that the Ld A.R has placed reliance on the decisions rendered by Hon ble Gujarat High Court. However, as pointed out by Ld D.R, the jurisdictional Hon ble Bombay High Court has decided this issue against the assessee in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and direct nexus with the export transaction so as to fall within the expression derived by the assessee in sub-section (1) of section 80HHC. Both the Assessing Officer and the Commissioner of Income-tax (Appeals) have made a distinction, which merits emphasis. The exchange fluctuation, as both those authorities noted, arose subsequent to the transaction of export. In other words, the exchange fluctuation was not on account of a delayed realization of export proceeds. The deposit of the receipts in the EEFC Account and the exchange fluctuation which has arisen there from cannot be regarded as being part of the profits derived by the assessee from the export of goods or merchandise. 8. There should not be any dispute that the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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