TMI Blog2021 (7) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered either as notional or speculative transaction. It is pertinent to note that if the assessee has to repay the loan and square off the contract on 31.03.2008, the assessee in addition to prepayment charges, has to make a payment - Therefore, the finding recorded by the Tribunal that the decision of WOODWARD GOVERNOR INDIA P. LTD. [ 2009 (4) TMI 4 - SUPREME COURT ] do not apply to the fact situation of the case, cannot be sustained in the eye of law. The working capital loan was used by the assessee for the purpose of business and therefore, the assessee had incurred the loss in the course of business and is entitled to claim deduction under Section 37(1) - Decided in favour of assessee. - I.T.A. NO.89 OF 2015 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny and a notice under Section 143(2) of the Act dated 13.08.2009 was issued to the assessee. During the course of the assessment proceeding, the Assessing Officer made a query about the provision of loss of ₹ 1,79,99,380/- on account of foreign exchange fluctuation impacting the working capital loan borrowed with foreign exchange swap option. The assessee thereupon submitted an explanation to the Assessing Officer that revised return of income was filed to claim foreign exchange fluctuation loss and the amount debited to profit and loss account was ₹ 68,81,094/- after setting off funeral expenses fluctuation bill of ₹ 1,11,18,287/-. 4. The Assessing Officer, by an order dated 18.12.2010 passed under Section 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with law. It is also submitted that the finding recorded by the Tribunal that liability of the assessee is neither ascertained nor crystalised is factually incorrect. In support of aforesaid submission, reliance has been placed on the decisions of the Supreme Court in 'CIT Vs. BADRIDAS GAURIDU P. LTD.' (2003) 261 ITR 256 (BOM.), 'CIT Vs. SOORAJMULL NAGARMULL' (1981) 129 ITR 169 (CAL.), 'CIT Vs. D CHETAN CO.' (2016) 75 TAXMANN.COM 300 (BOM.), 'CIT Vs. QUEST GLOBAL ENGINEERING SERVICES PVT. LTD.' IN ITA NO.133 OF 2015 DATED 15.02.2021, 'OIL NATURAL GAS CORPN. LTD. Vs. CIT' (2010) 322 ITR 180 (SC), 'CIT Vs. WOODWARD GOVERNOR INDIA P. LTD.' (2009) 312 ITR 254 (SC), 'CIT Vs,. WIPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the fact situation of the case. Lastly, it is urged that finding of fact has been recorded on this aspect by all the authorities under the Act and therefore, no substantial question of law arises for consideration in this appeal. 7. We have considered the submissions made on both sides and have perused the record. The only issue which arises for consideration in this appeal whether loss of ₹ 1,79,99,380/- incurred by the assessee as on 31.03.2008 being marked to market loss is speculative and notional in nature and is therefore liable to be disallowed. The issue involved in this appeal is squarely covered in decision of Bombay and Calcutta High Court in 'CIT Vs. BADRIDAS GAURIDU P. LTD.' and 'CIT Vs. SOORAJMULL NAG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The working capital loan outstanding as on the date of entering into foreign currency swap option was ₹ 10,00,00,000/- and the loan liability based on the rates prevailing as on 31.03.2008 comes to ₹ 11,79,99,380/-. Thus, the difference of ₹ 1,79,99,380/- is on account of foreign exchange fluctuation loss which is a revenue expenditure. The assessee, in the subsequent financial year i.e. 2008-09 has made a payment of ₹ 2,17,91,846/- as against aforesaid liability of ₹ 1,79,99,380/- which is evident from the copy of the ledger book. Thus, the aforesaid liability was crystalised and ascertained. The assessee had entered into a binding obligation when it entered into a foreign currency contract and the contract wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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