TMI Blog2018 (11) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of the normal business on the transactions entered into by Assessee, we do not see any reason to interfere with the order of Ld. CIT(A). There is no merit in Revenue grounds and accordingly the same are rejected. - ITA No.1375/Hyd/2017 - - - Dated:- 31-7-2018 - Shri B. Ramakotaiah, Accountant Member And Shri V. Durga Rao, Judicial Member For the Assessee : Shri T.S. Ajai For the Revenue : Smt. Pallavi Agarwal ORDER PER SHRI B. RAMAKOTAIAH, AM: This is an appeal by Revenue against the order of Ld. CIT(A)-2, Hyderabad dated 31.05.2017. The issue in this appeal is with reference to allowance of foreign exchange fluctuation loss considered by A.O as notional. 2. Briefly stated facts are that Assessee-co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether, in the f acts and circumstances of the case, whether the CIT(A) is correct in allowing the MTM losses and not treating them to be notional losses . 3. Ld. DR relied on the order of A.O, whereas Ld. Counsel for Assessee relied on the order of Ld. CIT(A) and the Hon ble High Court in the same facts which the Ld. CIT(A) has followed. 4. We have considered the facts of the case and the issue raised by Revenue. Even though Board circular No. 3/2010 considered the marked to market losses has notional. This issue was examined by the Coordinate Bench and Hon ble Jurisdictional High Court in the case of VST Industries Ltd. in ITTA No. 284 of 2014 has upheld the issue and distinguished that CBDT instruction No. 3/2010 would only apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orward contract, then the loss arising as a result of such forward contract cannot be said to be speculative as per section 43(S)(d) of the Act. It is also held that the loss/expenditure claimed by the assessee on account of f luctuation in the rate of f oreign exchange cannot be considered to be notional by following the instruction No. 3 of 2010 of CBDT. Relevant portions of the orders of Hon'ble ITAT, Hyderabad and Jurisdictional High Court are reproduced as under: Hon'ble ITAT's order The Honourable Gujarat High Court in case of Friends and Friends Shipping Pv.t Ltd. (Tax Appeal; No. 251 of 2010 dated 23.08.2011) (supra) af ter f ollowing the decisions of the Honourable Bombay High Court in case of CIT vs. Badri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al is sought to be pref erred and admitted against the judgment and order of the learned Tribunal dated 23rd August 2013 in relation to the assessment year 2008-09 on the following suggested questions of law: (i) In the f acts and circumstances of the case, whether the learned Tribunal is correct in law in holding that the loss / expenditure claimed by the respondent-assessee on account of fluctuation in the rate of foreign exchange i.e Market to Market (MTM) loss cannot be considered to be notional as per the CBDT instruction No.3 of 2010, when the said amount was rightly disallowed by the Assessing Off icer in terms of proviso '0 of Section 43(5) of the Act ? (ii) In the f acts and circumstances of the case, whether the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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