TMI Blog2012 (8) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... balance sheet of the assessee-company it was observed by the AO that it had advanced loan to its subsidiary company M/s.ETP International Limited, Singapore, with closing balance at ₹ 1.46 crore. A copy of account of ETP International Limited, Singapore as appearing in the books of account of the assessee has been reproduced by the Assessing Officer on page 2 of the assessment order from which it is apparent that there was opening balance of ₹ 88.29 lakh and further amount advanced in the current year stands at ₹ 58.21 lakh. The A.O. observed that on one hand the assessee had borrowed interest bearing loans on which huge amount of interest was paid and on the other hand it had extended loan to its subsidiary without charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be seen from the balance sheet of the subsidiary company that the amount owing to the assessee-company has been shown as Singapore Dollars 512648. From the assets side of the balance sheet, it can be observed that no amount has been taken away from the company by the shareholders or directors for any personal purpose. There is one item under the head Current assets titled as Other receivable, deposits prepayments standing at Singapore $ 147010. The break up of that amount is available on page 22 of the balance sheet of M/s.ETP International Limited, Singapore. The further details of the deposits and prepayments covered under this head have also been made available. From such details it can be seen that no amount received by M/s.E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee claimed deduction of ₹ 1,24,520 being loss of foreign exchange towards loan given by the assessee to its Singapore company. The A.O. made disallowance u/s 37(1) of the Act which action came to be affirmed in the first appeal. 5. Having heard the rival submissions and perused the relevant material on record we find that this issue is no more res integra in view of the judgment of the Hon ble Supreme Court in the case of CIT v. Woodward Governor India (P) Ltd. [312 ITR 254 (SC)] in which it has been held that the loss suffered by the assessee in respect of revenue liability on account of exchange difference as on the date of balance sheet is an item of expenditure allowable u/s 37(1) in the year of accrual. The ld. CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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