9911796707
TMI Blog2022 (10) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case are that the assessee is a company engaged in the business of power generation. They have filed their return of income for the assessment year 2010-11 on 24/09/2010 declaring a gross total income of Rs. 13,41,04,869/- under normal provisions and Rs. 30,18,07,500/- under section 115JB of the Income Tax Act, 1961 (for short "the Act") which was revised on 22/09/2011 in which the loss was reported at Rs. 12,95,43,935/-. Assessment under section 143(3) of the Act was complete by order 27/03/2013 but subsequently, Ld. PCIT revised the same under section 263 of the Act by order dated 12/03/2015 by directing the learned Assessing Officer to re-visit the assessment and to take a fresh view. Subsequently, assessment under section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CWIP, EDCP and capitalized machinery and equipment, it is evident that there was no gain or loss on account of foreign exchange fluctuation during the financial year 2009-10. 4. Per contra, learned AR vehemently relied on the findings of the Ld. CIT(A) and submitted that the learned Assessing Officer misunderstood the difference occasioned due to the variance in the method of valuation of the cost asset under Companies Act and section 43A of the Act. He placed reliance on the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India (P) Ltd., (2009) 179 Taxman 326 (SC). 5. We have gone through the record in the light of the submissions made on either side. According to the learned Assessing Officer, there was no gain or los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per Income Tax Act; that said additions to plant and machinery stand at Rs.1664, 72,60,666/- as per Companies Act; that, therefore, there is a difference of Rs. 5,97,96,117/- in the value of assets. He further observed that generally there is difference between profit and loss account prepared as per Companies Act and as per Income Tax Act. According to the Ld. CIT(A), the root cause of this difference is different treatment of some items of expenditure/income under both set of provisions, in the instant case, prima facie, the difference is on account of treatment of foreign exchange gain while accounting for the value of assets. On a perusal of the details of year wise CWIP, EDCP and capitalized machinery and equipment, Ld. CIT(A) found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the assessee gained the foreign exchange to the tune of Rs. 13,99,375/- which was reduced from the actual cost computed in terms of the Rules. 8. At this juncture, we deem it just and necessary to refer to the findings of the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India (P) Ltd., (2009) 179 Taxman 326 (SC), wherein the Hon'ble Court held that,- "33. As stated above, what triggers the adjustment in the actual cost of the assets, in terms of unamended section 43A of the 1961 Act is the change in the rate of exchange subsequent to the acquisition of asset in foreign currency. The section mandates that at any time there is change in the rate of exchange, the same may be given effect to by way of adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the tune of Rs. 13,99,375/-, the assessee rightly reached the difference of Rs. 5,97,96,117/- which occasioned solely because of the different methods followed for valuation of the plant and machinery under the provisions of Companies Act and differently in compliance with the provisions of the 43A of the Act. This aspect has already been dealt with by the Hon'ble Apex Court in the case of Woodward Governor India (P) Ltd., (supra) and, therefore, we do not find anything illegality or irregularity in the approach of the Ld. CIT(A) and accordingly, we decline to interfere with the same.
11. In the result, the appeal of Revenue is dismissed.
Order pronounced in the open court on this the 26th day of October, 2022 X X X X Extracts X X X X X X X X Extracts X X X X
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