TMI Blog2021 (12) TMI 1400X X X X Extracts X X X X X X X X Extracts X X X X ..... r, we find that it is not a possible direction by the Board to the AO rather Board under law cannot issue any such possible direction as the settled legal principle. AO is an independent authority and none can dictate him as to how and in what manner he is to complete the assessment. Conscious of this legal position, the Board in the instruction dated 23.3.2010 had stated that the Assessing Officer may follow the guidelines given in the said instruction. This is one more indication to say that the Assessing Officer is not bound over the instruction given by the Board. Thus, the only contention of the revenue appears to be based upon instruction issued by the CBDT which cannot override a decision of the Hon ble Supreme Court. Therefore, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nanam And Hon ble Justice Hiranmay Bhattacharyya For the Appellant : Mr. S. N. Dutta, Adv. For the Respondent : Mr. J. P. Khaitan, Sr. Adv., Mr. Indranil Nandy, Adv., Mr. Sayak Konar, Adv., ORDER This appeal by the revenue filed under Section 260A of the Income Tax Act, 1961 [the Act, in brevity] is directed against the order dated 17.3.2017 passed by the Income Tax Appellate Tribunal, B Bench, Kolkata [Tribunal] in ITA no.1156/Kol/2014 for the assessment year 2008-09. The revenue has raised the following substantial questions of law for consideration. a. Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal, B Bench, Kolkata has erred in law it allowing the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egular basis and the loss was recognised in its books of accounts, which is deductible under Section 37[1] of the Act. Further, the assessee contended that the loss was recognised in the books of accounts pursuance of the stipulations in accounting standard no.11 whereunder it is compulsory to give effect to foreign currency transaction as per the foreign exchange rates as on the date of the balance sheet. Alternate submission was made before the CIT[A] contending that if such loss is not allowable on accrual basis then the effect of such loss arisen in subsequent year on maturity of contract should be allowed. The CIT[A] by order dated 27.02.2014 allowed the alternate submissions made by the assessee. Aggrieved by the same, the assessee pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. Thus, the assessee was granted relief and the appeal was allowed. The revenue is before us challenging the same as contended before the Tribunal. The revenue before us has also placed the instruction issued by CBDT circular no.3 of 2010 dated 23.03.2010 contending that the said instruction was issued post the decision in Woodward Governor India [P] Ltd. Ors.. In our considered view, the circular instruction issued by the Board may bind the authority but it would not bind the Court more so when the law has been laid down by the Hon ble Supreme Court as rightly pointed out by the Tribunal the facts are not in dispute and the revenue did not dispute that the loss is arising in respect of forward contract, which have been expired on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleting the disallowance being notional loss on outstanding foreign derivative contracts was approved by holding that the decision is in-conformity with the decision of the Hon ble Supreme Court in Woodward Governor India [P] Ltd. Ors. The revenue had filed a Special Leave Petition in Special Leave to Appeal [C] No[s].1422/2019 which was dismissed by order dated 17.01.2020. In the case of the same assessee, namely Suzlon Energy Limited, the Hon ble Supreme Court in Principal Commissioner of Income Tax vs. Suzlon Energy Ltd. [2020] 121 taxmann.com 137[SC] approved the decision of the High Court upholding the order of the Tribunal allowing the assessee s claim of foreign exchange fluctuation loss on mark to market basis. In the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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