TMI Blog2018 (3) TMI 2003X X X X Extracts X X X X X X X X Extracts X X X X ..... ve relied upon CIT Vs. Woodward Governor India (P) Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] . The hedging transaction was necessary for the assessee to protect itself from currency fluctuation risks it was inevitably exposed in the case of export trade. The assessee had reported identical transactions in the past which were accepted by the Revenue. For these reasons, the Court holds that no substantial question of law arises. Advance of interest free loans to a related party - HELD THAT:- The findings of fact again are that the lending was on the basis of commercial expediency. TDS u/s 195 - Non deduction of TDS on account of export commission - HELD THAT:- The findings of fact are that the foreign entity receiving the amounts were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows:- 10. Having gone through the above cited decisions, we find that it has been unanimously held therein that forward contracts transactions when entered into with the banks for hedging the losses due to foreign exchange fluctuation on the export proceeds, are to be considered integral or incidental to the export activity of the assessee. Therefore, the losses or gains constitute the business loss or gains and not the speculation activities. The Hon ble Supreme Court in the case of CIT Vs. Woodward Governor India (P)Ltd. (2009) 312 ITR 254 (SC) has also been pleased to hold that loss suffered by assessee on account of foreign exchange difference as on the date of balance sheet is an item of expenditure under section 37(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... currency fluctuation risks it was inevitably exposed in the case of export trade. The assessee had reported identical transactions in the past which were accepted by the Revenue. For these reasons, the Court holds that no substantial question of law arises. The other two questions of law with respect to advance of interest free loans to a related party, the findings of fact again are that the lending was on the basis of commercial expediency. The last question was with respect to non deduction of TDS on account of export commission. The findings of fact are that the foreign entity receiving the amounts were not Indian residents and subject to tax and that the services rendered were rendered outside India. In ITA 1141/2017 only two que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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