TMI Blog2021 (9) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... under the law. - Decided in favour of assessee. Addition on account of exchange rate fluctuation loss - Non affording any opportunity to the assessee for explaining the nature and justification for the allowability - HELD THAT:- The loss suffered by the assessee on account of the exchange difference on the particular date is indicated in the balance sheet and the same is an item of expenditure u/s 37(1) of the Income Tax Act, 1961. It is an allowable expenditure. In-fact, no adjustment on account of provisions u/s 43A of the Act was reported by the tax auditor in schedule relating to depreciation in Form 3CA-CD. These facts were not disputed by the Revenue authorities and are clearly revenue in nature. Therefore, Ground No. 2 is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome on 24/11/2011 for Assessment Year 2011-12 declaring an income of ₹ 198,35,504/-. The return was processed u/s 143(1) of the Act and was selected for scrutiny assessment and statutory notices u/s 143(2) of the Act were issued to the assessee. All the data, information, clarifications, details sought by the Assessing Officer was duly filed by the assessee. The assessment order u/s 143 (3) of the Act was passed on 14/3/2014 assessing the total income of the assessee at ₹ 1,67,15,540/- after making certain disallowances and additions, details of which are as under:- Sr. Nature of disallowance/addition Amount (Rs.) 1. Disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not arrange confirmations from two creditors, that are Durga Das Publications Pvt. Ltd. (₹ 13,12,602/-) and Travel Click Incorporation (₹ 9,59,309/-) as one of the creditors namely Travel Click Intentional was an overseas creditors. The Ld. AR submitted that these two creditors are also dealing in the identical business i.e. Advertisement and Marketing in which the assessee is doing business. The Assessing officer made the addition in respect of these two creditors u/s 68. At the Appellate proceedings before the CIT(A), the assessee filed certain additional evidences in respect of bonafide business relation with these creditors consisting of copy of ledgers of these parties in the books of assessee, copy of TDS Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed by the assessee in support of his submission. The Ld. AR relied upon the decision of the of the Hon ble Supreme Court in case of Anees Ahmed and Sons Vs. CIT 297 ITR 441 (SC). The Ld. AR further submitted that all these six parties for which the Assessing Officer asked balance confirmation have provided services in the nature of Advertisement Marketing to the assessee. However, the Assessing Officer accepted the genuineness of the four parties for which confirmation was furnished by the assessee and treated remaining two parties as in genuine and made addition of the closing balance of the said two parties u/s 68 of the Act, merely on the ground that the assessee was not able to furnish the balance confirmations. The Ld. AR pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome tax returns of the assessee have been shows that such credit has been in-fact offered for tax during the year under consideration. The above position translates to the facts that outstanding balances added u/s 68 in Assessment year 2011-12 have been already subjected to tax in Assessment Year 2014-15 and if the amount addition is upheld in Assessment Year 2011-2, the same would amounts to double tax of the said amount in the above two years. 6. The Ld. DR relied upon the order of the CIT(A) and Assessment Order. 7. We have heard both the parties and perused all the relevant materials available on record. From the perusal of the records and the submissions of the Ld. AR the confirmations and the ledger accounts along with other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy in notes to financial during the year under consideration in pursuant to Para 4D of Part 2 of Schedule 6 of Companies Act, 1956 and none of the expenditure is in the nature of capital transaction. Foreign exchange fluctuation loss on account of revenue transaction, as is the case of the assessee, is allowable u/s 37 of the Act. The Ld. AR relied upon the decision of CIT Vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (S.C) as well as Oil and Natural Gas Corporation Ltd. Vs. CIT 332 ITR 180 (S.C). The Ld. AR also relied upon the decision of the Hon ble Madhya Pradesh High Court in case of MP Financial Corporation Vs. CIT 165 ITR 765. 9. The Ld. DR relied upon the order of the CIT(A) and Assessment Order. 10. We have heard both ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
