TaxTMI 
TaxTMI 
2017 (1) TMI 1202
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....2009 declaring loss of (-)Rs. 51,32,320/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act of the Act vide order dated 31.12.2011 wherein the income of the assessee was determined at Rs. 88,58,680/- in view of the following disallowances: - i) Excess claim of foreign exchange loss Rs. 85,99,187/- (ii) Under section 14A read with rule 8D Rs. 53,81,133/- 2.2 Aggrieved by the order of assessment for A.Y. 2009-10 dated 31.12.2011, the assessee preferred an appeal before the CIT(A)-21, Mumbai, which was dismissed vide impugned order dated 29.01.2005. 3. Being aggr....
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.... for Revenue and the material on record. 5. Ground No. 1 - Foreign Exchange Loss 5.1 In this ground (supra), the assessee assails the impugned order of the learned CIT(A) as erroneous in upholding the Assessing Officer's (AO) action in reducing foreign exchange loss claimed by the company to the extent of Rs. 85,99,187/- on outstanding foreign sundry credits. 5.2 The learned D.R. supported the finding rendered by the learned CIT(A) on this issue. It is submitted that in the course of assessment proceedings, the AO had observed that the assessee had debited total foreign exchange loss of Rs. 5,73,30,343/- by applying the average of various rates of US$ to Rupee ranging between Rs. 48.53 to Rs. 59.29; whereas it should have been valued @ ....
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....om the AO in the matter and considering the assessee's submissions, dismissed the assessee's grounds raised on this issue holding as under at paras 3.4 of the impugned order: - "3.4 I have considered the finding of the Assessing Officer as well as rival submission of the appellant through letter dated 18.04.2012 and 29.01,2015, carefully. I have also heard the various arguments of the Ld. A.R. carefully. I find that Ld. Assessing Officer has rightly calculated foreign exchange loss by adopting exchange rate as indicated by RBI as on 31.03.2009, @ Rs. 50.64 whereas, there is no justification whatsoever with the appellant to apply different exchange rate without any substantiation. Ld. Assessing Officer has rightly adopted Rs. 50.64 or rate ....
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....eparation of final accounts including profit and loss account. The value of closing stock or outstanding credit is to be made on last day of accounting, considering the method of accounting of such assessee. In this case, method of accounting, as admitted by the assessee is market price or cost whichever is lower. In this case, Assessing Officer has adopted rate of exchange of Rs. 50.64 being prevailing exchange rate as on 31.3.2009, hence his working in para 4 of the assessment order is tenable in the eye of law. Apparently, appellant has adopted wrong working formula and therefore has claimed excess foreign exchange loss of Rs. 85,99,187/-. Thus, the finding and calculation of foreign exchange loss by the Assessing Officer is sustained. I....
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....A) in upholding the disallowance under section 14A read with Rule 8D. 6.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. From the details on record it is seen that the AO noticed that the assessee had earned dividend income of Rs. 21,700/- which was exempt under section 10(34) of the Act and that no disallowance of expense incurred for earning such income was disallowed suo moto by the assessee. We find that after observing these facts, the AO sought the explanation of the assessee in the matter and brushed aside the same as not acceptable for the stated reasons that the assessee has not taken proper values of respective part of Rule 8D. In our view, from a perusal of material on r....