TMI Blog2017 (6) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration. Both the authorities below concurrently found that the premium paid by the assessee was in the course of setting up of project Surajbari I Project, therefore, the loss, if any, is on the capital field and it cannot be allowed as revenue loss. Assessee now claims alternatively that if it is capital loss, it will definitely go to increase the cost of the project, hence, the assessee shall be given depreciation on the enhanced value of asset. Admittedly, the loan was borrowed for setting up of plant for generation of wind energy, therefore, the loss suffered in foreign exchange fluctuation would definitely go to increase the cost of the project to the extent of loss suffered by the assessee. As rightly foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax (Appeals)-1, Chennai, dated 08.11.2016 and pertain to assessment year 2013-14. Therefore, we heard both the appeals together and disposing of the same by this common order. 2. Let s first take the assessee s appeal in I.T.A. No.3344/Mds/2016. 3. The only issue arises for consideration in this appeal is disallowance of ₹ 36,33,334/- being the premium paid on forward contracts to cover the exchange fluctuations on the repayment of loan. 4. Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the assessee availed loan from State Bank of India for its project at Surajbari. The project was 1.5 MW. According to the Ld. representative, the assessee is admittedly engaged in the business of generation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. representative has also placed his reliance on the decision of Bangalore Bench of this Tribunal in JSW Steel Ltd. v. ACIT (2010) 133 TTJ 742. 6. On the contrary, Shri Sreenivasan, the Ld. Departmental Representative, submitted that he is placing his reliance on the order of the CIT(Appeals). The Ld. D.R. further submitted that in view of Section 43A of the Income-tax Act, 1961 (in short 'the Act'), the CIT(Appeals) has rightly found that the loss suffered by the assessee in foreign exchange contracts was in the course of setting up of the plant, therefore, the loss has to be treated as capital loss, hence, it cannot be allowed. 7. We have considered the rival submissions on either side and perused the relevant material a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer is directed to grant depreciation to the assessee as applicable on the enhanced value of the project after commencement of its business. 9. Now, coming to Revenue s appeal in I.T.A. No.211/Mds/17, the only issue arises for consideration is disallowance of expenditure in earning the exempt income under Section 14A of the Act along with Rule 8D of Income-tax Rules, 1962. 10. Shri Sreenivasan, the Ld. Departmental Representative, submitted that the Assessing Officer disallowed ₹ 7,41,93,117/- under Section 14A of the Act. The CIT(Appeals) allowed the claim of the assessee on the ground that the assessee has not earned any exempt income. Referring to Rule 8D, the Ld. D.R. submitted that Income-tax Act does not say when there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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