TMI Blog2021 (10) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favour of assessee. - ITA No.1998/Del/2017 (Assessment Year: 2011-12) - - - Dated:- 17-8-2021 - SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. PAWAN SINGH, JUDICIAL MEMBER Appellant by Sh. Satyam Sethi, Advocate Respondent by Ms. Mrinalini Sapra, Sr. DR ORDER PER N. K. BILLAIYA, AM: This appeal filed by the assessee is preferred against the order of the CIT(A)-7, New Delhi dated 14.02.2017 for A.Y. 2011-12. 2. The solitary grievance of the assessee is that the CIT(A) erred in upholding the disallowance of depreciation of ₹ 54,29,216/- relatable exchange fluctuations in respect of assets acquired in India from the funds raised through foreign currency convertible bonds following its own orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,65,54,992/- to acquisition of indigenous depreciable assets. Accordingly, it had attributed the liability on account of forex loss to the cost of the fixed assets and claimed depreciation of ₹ 1,56,34,104/ which was allowed by the Assessing Officer. We find the learned CIT(A) enhanced the income to the extent of depreciation of ₹ 1,56,34,104/- by directing the Assessing Officer to reduce an amount of ₹ 12,65,54,992/ from the WDV on the ground that section 43A was not applicable since the assets were not acquired from abroad and the liability of the assessee towards cost of the assets or repayment of money borrowed has not increased or decreased during the year. It is the submission of the learned counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereon. Thus, the assessee purchased the machinery in India from the foreign funds through FCCBs which fact is not disputed by the authorities below. It is, therefore, clear that though Section 43A apply to the assets acquired from Abroad, still the A.O. without justification applied Section 43A for making the disallowance of depreciation against the assessee. Section 43A thus could not apply in the case of the assessee which is also held by various Benches of the Tribunal in the decisions quoted above. Accounting Standard-11 would also apply in the case of the assessee. The assessee has also explained that Companies Amendment Rules also apply to the facts of the case because option is given to assessee and it provided Where long term f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es below. The Ld. D.R. has not pointed-out any infirmity in the Order of the Ld. CIT(A) in allowing the depreciation to the assessee as per Law. We, therefore, do not find any merit in this Ground No.2 of the appeal of the Revenue and the same is accordingly dismissed. Since, the assessee in the instant case has attributed ncreased liability of ₹ 12,65,54,992/- to the cost of the is and the depreciation was allowed, therefore, although assessee has a good case to argue that exchange fluctuation loss attributable to depreciable assets acquired in India is an allowable revenue expenditure, however, it would require tedious exercise of modifying assessments for number of year. Therefore, we hold that the assessee is entitled to dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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