TMI Blog2018 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... udit opinion. Having regard to the fact that the assessee’s challenge to the previous year’s re-assessment orders was successful - in FIS Global Business Solutions India Pvt. Ltd. v. ACIT [2018 (11) TMI 601 - DELHI HIGH COURT] the reassessment proceedings are unsustainable - the impugned re-assessment notice dated 31.03.2018, cannot be sustained - Decided in favour of assessee. - W.P.(C) 12277/2018, C.M. APPL.47539/2018 - - - Dated:- 16-11-2018 - MR. S. RAVINDRA BHAT AND MR. PRATEEK JALAN JJ. Petitioner Through : Sh. Piyush Kaushik and Sh. Tanveer Zaki, Advocates. Respondents Through : Sh. Sanjay Kumar, Advocate. MR. S. RAVINDRA BHAT (OPEN COURT) 1. Issue notice. Sh. Sanjay Kumar, Advocate accepts notice. With parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee claimed and was allowed deduction of ₹ 1,37,73,528/- on account of Forex gain on Certegy (Interest Income). Forex gain on interest income, being revenue nature was not an allowable deduction. The issue is considered and on perusal of the assessment folder pertaining to2011-12 it was noticed that in the computation of income, the assessee has deducted Rs.,37,73,528/- on account of Forex gain on certegy. Further, of ₹ 1,37 ,73,52gl-. ₹ 1,40,50,4221- was an account of Foreign Exchange fluctuation gain on loan balance receivable from Certegy and ₹ 2,76,894/- was on account of Foreign Exchange fluctuation loss on Interest income on loan advanced to Certegy. Foreign Exchange fluctuation loss of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the period in which they arise, except as stated in para 10 and para II which deals with exchange differences arising on the payment of liabilities incurred for the purpose of acquiring fixed assets, which topic falls under section 43A of the 1961 Act! Further, the Hon ble Supreme court in Sutlej cotton Mills Ltd. vs CIT [(1979) I 16 ITR 1 (SC) I observed as under: The law may, therefore, now be taken to be well settled that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be a trading profit or loss if the foreign currency is held by the assessee on revenue account or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear under consideration have been recorded above. I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during the assessment proceedings and have noted that the assessee has not fully and truly disclosed all the material facts necessary for his assessment for the year under consideration. Attention in this regard is drawn to Explanation 1 to Section 147 of the Act which is being reproduced for ready reference. Explanation I - Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to a disclosure within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial at his peril. .. Full and true disclosures must mean what the statute says. These disclosures cannot be garbled or hidden in the crevices of the documentary material which has been filed by the assessee with the Assessing Officer. The assessee must act with candour and the disclosure must be full and true. A full disclosure is a disclosure of all material facts which does not contain any hidden material or suppression of fact. A true disclosure is a disclosure which is truthful in all respects. Just as the power of the Revenue to reopen an assessment beyond a period of four years is restricted by the conditions precedent spelt out in the proviso to Section 747, equally an assessee who seeks the benefit of the proviso to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have been an allowable expenditure, being revenue in nature. It was further stated that an accounting standard AS 11 required disclosure of such gains, as a revenue item and not as one falling in the capital stream. 5. Carlton (supra) emphasises that reliance by the Revenue upon an audit report, cannot be considered as tangible material. The relevant extracts of that decision are as follows: 8. Ms. Prem Lata Bansal, learned counsel appearing for the Revenue has contended that audit party can on factual basis ask for reassessment and which has, therefore, been done in the present case. It is, however, admitted by her that a mere change of opinion does not permit action under section 147/148 of the Act. 9. We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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