TMI Blog2020 (11) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... INDIA P. LTD. M/S HONDA SIEL POWER PRODUCTS LTD. [ 2009 (4) TMI 4 - SUPREME COURT] Applying the said principle to the facts and circumstances of the case, we hold that the exchange fluctuation loss arising on account of the revaluation of business advances on the close of the year by the assessee is allowable as deduction in the hands of the assessee. Appeal of the assessee is allowed. - ITA No.5743/Del/2017 - - - Dated:- 14-5-2020 - Ms. Sushma Chowla, V.P And Shri Prashant Maharishi, AM For the Appellant : Sh.V.K.Garg, Advocate For the Respondent : Sh.H.K.Choudhary, CIT DR ORDER PER SUSHMA CHOWLA,VP The present appeal filed by assessee is against order of CIT(A)-30, New Delhi dated 20.06.2017 relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and not capable of being sustained. 3. That the grounds of appeal as herein are without prejudice to each other. 3. The Ld.AR for the assessee at the outset pointed out that the issue raised in the present appeal on account of treatment of exchange fluctuation loss on revaluation of business advances stand fully covered in favour of the assessee by the orders of the Tribunal in assessee s own case for the earlier years. 4. Briefly in the facts of the case during the year under consideration, the assessee company had claimed deduction on account of foreign fluctuation loss at ₹ 2.59 crores (approx.) in its Profits Loss A/c. The Assessing Officer show-caused the assessee as to why the said loss should be allowed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services to be rendered. Pending adjustment, the said business advance was reflected as advance against services to be rendered in the books of account as on 31.03.2014. There being diminution in the value of Euro as on 31.03.2014, difference in exchange fluctuation on the said advance of 20,00,000 Euro amounting to ₹ 2,60,00,000/- (wrongly taken as ₹ 2,59,97,238/- being net of other amounts credited in Exchange fluctuation a/c) was provided in the books of accounts as revenue expense/exchange loss. The Assessing Officer treated the said exchange fluctuation loss as notional loss and disallowed the claim of the assessee based on similar disallowance made in some prior years which was upheld by CIT(A). 8. The issue of disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, 322 ITR 180 (SC) and also in the case of CIT vs Woodward Governor India P.Ltd. 312 ITR 254 (SC). The Hon ble Delhi High Court in the case of Taiko Chander Nagar Chemicals P.Ltd. reported in 311 ITR 475 (Del.) has held that exchange fluctuation loss in respect of business advances received in the course of business on account of reinstatement of outstanding balance at the year end is allowable as business loss. 12. Applying the said principle to the facts and circumstances of the case, we hold that the exchange fluctuation loss arising on account of the revaluation of business advances on the close of the year by the assessee is allowable as deduction in the hands of the assessee. Accordingly, we hold so and delete the addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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