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TMI Blog2020 (11) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... d its return of income for the AY.2009-10 on 24- 09-2009, admitting total income of Rs. 3,73,47,310/-. The assessment was completed on 23-12-2011 by treating the loss of Rs. 1,41,07,623/- with regard to derivative transactions as 'speculative loss' and brought it to tax u/s.43(5) of the Income Tax Act [Act]. 2.1. Thereafter, the assessee filed an appeal before the CIT(A) and the matter transferred upto ITAT. The ITAT remitted the issue back to the file of AO for deciding the same afresh in accordance with law. Thus, the assessment was completed u/s.143(3) r.w.s.148 and 254 of the Act. 3. During the remand proceedings, the AO observed that while computing the loss on foreign exchange, booking rate in respect of SBI was taken @43.015 US$, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no basis of making addition of Rs. 1,91,84,500/- with respect to loss on derivate transactions. 3. Any other ground that may be urged at the time of hearing". 5. The case is taken up for hearing on 06-10-2020 through video conferencing and both the parties were heard. 6. Ld.DR, relied upon the assessment order while the Ld.Counsel for the assessee supported the orders of the CIT(A). 7. For the sake of ready reference, the relevant para of the CIT(A)'s order is reproduced herein below: "The details of the Foreign Currency Loans availed by the Assessee from SBI by converting the availed balances in Working Capital Facility, under FCNR-B Scheme, were as follows: Particulars A.Y.2008-09 A.Y.2009-10 Loan-I USD 61,00,000/- L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trangely the AO computed the gain at Rs. 14,03,000 [6100000* (42.7850 - 43.0150)]. This difference is only due to SBI selling rate and buying rate on 04.06.2008 and 05.06.2008. Erroneously the AO made the addition, whereas there is no profit emanated out of the foreign exchange transaction. Thus, I hold that there is no basis of making addition of Rs. 1,91,84,500 and hence it is to be deleted". 8. Thus, it is seen that the assessee had initially taken a loan of US$ 61 Lakhs on 04-12-2007, which got closed on 04- 06-2008 and has resulted in a loss of Rs. 1,77,81,500/- during the AY.2008-09 and again for the AY.2009-10, there was another loan of US$ 61 Lakhs on 05-06-2008 and on the closing date i.e., on 05-12-2008, this has again resulted i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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