TMI Blog2018 (6) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... e file. Emerges that the assessee’s above extracted heads of foreign financial instruments are in revenue field. It appears to have already followed netting method in computing the impugned losses. Conclude that the CIT(A) has rightly held the assessee’s impugned mark to market loss incurred on foreign exchange fluctuation to be allowable. TDS u/s 194H - non deduction of tds - Held that:- The fact remains that the DRP had issued a clear cut direction that TDS in question had to be deducted @ ₹ 17 per card coming to ₹ 33,71,771/- only which has already been upheld. The said findings have attained finality. No reason to interfere with the CIT(A) action deleting the impugned disallowance in tune thereof. The Revenue’s latter su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of forward foreign exchange contracts and relying on said Instruction, concluded that the appellant has undertaken hedging and loss for the entire future period for which the payment is still to be made has been debited as a provision and the same was held to be not allowable relying on Instruction No. 3/2010 (supra). Hence, ₹ 35,79,659/-, being provision for future loss on foreign exchange fluctuation was disallowed as deduction and added back to the total income. The appellant s A. R has contended that M/s Bonsai India receives 70% of the net revenue received by UCT, Inc. from the end user in respect of both Software and Engineering Products while UCT, Inc. retains the balance 30%, and from statements of impugned transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to verify that the transactions were not in the nature of derivative transactions or in the nature of capital loss . Once it is established that they were not so, the Ld. DCIT has no option left than to allow the loss on foreign exchange transactions. It has been held in a number of cases, old and new, that The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. [Agrawal Warehousing Leasing Ltd. vs. CIT 257 ITR 235(M.P.) followed in DCIT vs. Sham Sunder Sharma (ITAT Chandigarh) ITA No. 966/Chd/2014] The appellant s A. R has averred that as per the agreement between Bonsai India and UCT Inc. USA, for any order procured, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and allow the claim after duly ascertaining from the same that the transaction were not in the nature of foreign exchange derivative transaction or in the nature of capital loss. I find that there is merit in the appellant s submission that the claim of net loss of ₹ 35,79,659/- had a reason due to restatement of monetary items in foreign currency (cash, receivables. Payable, etc) using the exchange rate on the balance sheet date, i.e. 31.03.2010. it was further argued that in support of the claim relevant statements were filed which showed the amount of gain or loss and had a reason showing that the transaction were not in the nature of foreign exchange derivative transaction or in the nature of capital loss. Moreo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s keeping in mind the CBDT Circular No.3/2010 dated 23.03.2010 dealing with such mark to market loss arising on account of recasting of book results as per actual value of the relevant foreign financial instruments on the closing day of the accounting period in question. We see no merit in Revenue s instant argument. It emerges that the assessee had earlier approached the Dispute Resolution Panel DRP to issue the relevant direction to the Assessing Officer. Scope of the Assessing Officer s verification in the instant consequential round of proceedings was very much a limited one. He had only to verify the impugned mark to market loss as not to have arisen from derivatives or in capital field. There is hardly any quarrel on such DRP s dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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