TMI Blog2023 (4) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... for in the findings of the ld. CIT(A). Therefore, revenue ground is dismissed. Addition for notional loss arising on account of foreign exchange loss - alleged claim of foreign currency loss is notional in nature and the same has been calculated for the outstanding foreign currency payable/receivable by the assessee for the contract which have not expired at the close of the year - HELD THAT:- In the instant case, such contract which did not expire on 31.03.2013, the foreign currency loss has been calculated, considering the currency value on the last date of the financial year. In the subsequent period, when these contracts expire or the liability to be payable or the claim on receiving from debtors is crystallized actual gain/loss is calculated and routed through the profit and loss account. Since, the said claim is notional and has been claimed in order to make the true and fair presentation of the financial statement, therefore, respectfully following the ratio laid down in the case of Woodward Governor India Pvt Ltd [ 2009 (4) TMI 4 - SUPREME COURT] no infirmity in the findings of the ld. CIT(A) deleting the disallowance - ground raised by the revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , LTU-1, Chennai. 2. Facts in brief are that the assessee is a limited company engaged in manufacturing and marketing petrochemicals viz. Linear Alkyl Benzene, Epicholoorohydrin and Chemical intermediates Caustic Soda and Chlorine, filed nil income return filed on 22.11.2012 for the relevant assessment year 2013-14. The case was selected for scrutiny followed by serving of notice u/s. 143(2) 142(1) of the Act. Ld. AO, after considering submissions of the assessee completed the assessment proceedings making various additions and disallowance amounting to Rs. 6,05,22,819/-, computing the income of the assessee in the following manner: Returned Income Nil Add: 1. Disallowance u/s. 92CA 73,74,582/- 2. Disallowance u/s. 14A r.w.s. rule 8D 1,24,61,660/- 3. Disallowance of notional loss 1,93,65,000/- 4. Addition in difference in closing stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has erred and directed the AO to delete the addition made on Long Term Capital Loss. 5.1 The learned CIT(A) failed to note the fact that there is a difference between the sale agreement and sale consideration. 5.2 The learned CIT(A) failed to note the fact that the expenses claimed by the assessee towards sales as they were incurred in the previous Financial year relating to A.Y.2012-13. 6. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing officer be restored. 5. The ld. DR vehemently argued supporting the findings of the Assessing Officer and specifically with regard to the addition for difference in closing stock, it was stated that there was a mismatch in the quantity mentioned in the audit report and the same needs to be rectified, if the assessee is claiming so. Similarly, with regard to the addition for long term capital gain which was on account of profit on sale of shares, it was submitted that there was a sale agreement for sale of share at a agreed price, but the consideration received was less for which no details have been filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement. The ld. CIT(A) deleted the said disallowance applying the ratio laid down by the Hon ble Apex Court in the case of CIT vs Woodward Governor India Private limited (2009) 312 ITR 254. 12. We find that the alleged claim of foreign currency loss is notional in nature and the same has been calculated for the outstanding foreign currency payable/receivable by the assessee for the contract which have not expired at the close of the year. In the instant case, such contract which did not expire on 31.03.2013, the foreign currency loss has been calculated, considering the currency value on the last date of the financial year. However, in the subsequent period, when these contracts expire or the liability to be payable or the claim on receiving from debtors is crystallized actual gain/loss is calculated and routed through the profit and loss account. Since, the said claim is notional and has been claimed in order to make the true and fair presentation of the financial statement, therefore, respectfully following the ratio laid down by the Hon ble Supreme Court in the case of CIT vs Woodward Governor India Pvt Ltd (Supra), we find no infirmity in the findings of the ld. CIT(A) delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the ld. AO for examining it afresh for which necessary details shall be filed by the assessee so as to unable the Assessing Officer to decide in accordance with law. 14. The other part of addition of long term capital gains is a disallowance of Rs. 1,05,85,891/- for a cost incurred by the assessee for effecting the said transaction of sale of equity shares which is paid to MAPE Advisory Group, Mumbai- 30. The main reason for the said disallowance by the Assessing Officer was that the major portion of the professional fees to MAPE Advisory Group was paid in the preceding year and the invoice was raised on 09.10.2011. The ld. AO, was of the view that since the invoice relates to financial year 2011-12, expenditure claimed cannot be allowed during the year under appeal. However, ld. CIT(A) accepted submission filed by the assessee observing that the advances was given during the financial year 2011-12 to MAPE Advisory Group, but since, the sale of equity shares finally concluded during the financial year 2012-13 relevant to assessment year 2013-14 claim is justified to calculate the long term capital gains on the sale transaction. 15. We therefore are of the view that expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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