Archidply Industrie Ltd , Bangalore V. The Deputy Commissioner of Income TAx Circle-1(1)(1), Bangalore

ITA 1151/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5598 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: GANPATLAL KAWAD

Judgement Text

ITA.1151/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1151/BANG/2017) (ASSESSMENT YEAR : 2011-12) ARCHIDPLY INDUSTRIES LTD, NO.292, G. K. MANOR, 1 ST FLOOR, NEHRU CIRCLE, SESHADRIPURAM BENGALURU 560 020 .. APPELLANT PAN : AAFCA3135N V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -11(1), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. GANPATLAL KAWAD, CA REVENUE BY : SMT. PADMAMEENAKSHI, JCIT HEARD ON : 30.01.2018 PRONOUNCED ON : 31.01.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT (A)-I, BENGALURU, DT.13.02.2017, FOR THE ASSESSMENT YEAR 2 011-12, ON THE FOLLOWING GROUNDS : ITA.1151/BANG/2017 PAGE - 2 02. IN THIS REGARD THE CIT (A) IN PARAS 5 AND 6 OF HIS ORDER HAD HELD AS UNDER : 5. IN THE MATTER OF HEDGING CHARGES OF RS.15,41,533 /- DISALLOWED BY THE AO, THE APPELLANT HAS SUBMITTED T HAT THE ITAT HAD DISMISSED OUR APPEAL AGAINST THE ORDER OF CIT ( A) AND AO FOR AY 2008-09. PRESENTLY THE MATTER ON THIS ISSUE IS P ENDING BEFORE THE H'BLE HIGH COURT OF KARNATAKA. 6. IT IS SEEN THAT THE AO IN HIS ASSESSMENT ORDER H AS STATED THAT THE LOSS ON ACCOUNT OF RESTATEMENT OF LOAN ON THE L AST DAY OF THE PREVIOUS YEAR IS NOT F AN ALLOWABLE EXPENDITURE AS IT IS CAPITAL IN NATURE. THE LOSS CLAIMED BY THE ASSESSEE IS NOT THE ACTUAL EXCHANGE FLUCTUATION LOSS, BUT A PREMIUM PAID ON FO RWARD CONTRACT TO SECURE AGAINST ADVERSE FLUCTUATION OF FOREIGN EXCHANGE. IN THE CASE OF THE APPELLANT ADMITTEDLY THE FOREIGN EXCHANGE LOAN WAS IN CONNECTION WITH CONVERSION OF A RUPEE TERM LOAN INT O A FOREIGN CURRENCY LOAN AND THE PURPOSE OF THE LOAN W AS FOR PURCHASE OF MACHINERY WHICH IS ON CAPITAL ACCOUNT. IN VIEW OF THE ABOVE, THE DISALLOWANCE MADE BY THE AO IS UPHEL D. ITA.1151/BANG/2017 PAGE - 3 03. THE LD. AR HAS SUBMITTED THAT THOUGH THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL FOR AY 2008-09 ON WHICH REL IANCE WAS PLACED BY THE CIT(A), HOWEVER THE MATTER IS SUBJECT TO ADJ UDICATION BEFORE THE HONBLE HIGH COURT AND THE RESULT IS AWAITED. 04. ON THE OTHER HAND THE LD. DR BROUGHT TO OUR NOT ICE PARA 14 OF THE DECISION OF THE COORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR AY 2008-09, VIDE ITA.1079/BANG/2011, DT.31.07.2012, WH ICH READS AS UNDER: 14. THE DECISION OF THE HONBLE SUPREME COURT IN TH E CASE OF WOODWARD GOVERNOR INDIA P. LTD (SUPRA) WOUL D APPLY ONLY IN RESPECT OF EXCHANGE FLUCTUATION ON LO ANS TAKEN FOR REVENUE PURPOSES. IN THE CASE OF THE ASSESSEE ADMITTEDLY THE FOREIGN EXCHANGE LOAN WAS IN CONNECTION WITH CO NVERSION OF A RUPEE TERM LOAN INTO A FOREIGN CURRENCY LOAN. THE PURPOSE OF THE LOAN WAS FOR PURCHASE OF MACHINERY W HICH IS ON CAPITAL ACCOUNT. THEREFORE, THE SUM IN QUESTION CANNOT BE CLAIMED AS DEDUCTION. THE OTHER DECISIONS RELIED U PON BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE ON THE LOS S ON ACCOUNT OF FLUCTUATION OF FOREIGN EXCHANGE RELATABL E TO REVENUE ACCOUNT AND HAVE NOTHING TO O WITH THE CLA IM OF THE ASSESSEE AS MADE IN THE PRESENT CASE. THE SUM IN Q UESTION CANNOT ALSO BE CAPITALISED TO THE VALUE OF THE MACH INERY FOR THE REASON THAT THE MACHINERY HAS ALREADY BEEN PUT TO USE. THE LD. DR HAS SUBMITTED THAT THE CASE OF THE ASSES SEE IS COVERED AGAINST THE ASSESSEE FOR AY 2011-12 AS THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES OF THE CASE. 05. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL. IN OUR VIEW THE ISSUE IS COVERED AGAINST THE ASSESS EE BY THE DECISION OF THE COORDINATE BENCH FOR AY 2008-09 (SUPRA). THERE FORE FOLLOWING ITA.1151/BANG/2017 PAGE - 4 THE DECISION OF THE COORDINATE BENCH IN THE CASE OF THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. ACCORDINGLY THE SAME IS DISMISSED. NEEDLESS TO SAY AS AND WHEN THE HON BLE HIGH COURT PASSES AN ORDER, THE SAME SHALL BE GIVEN EFFECT TO IN ACCORDANCE WITH LAW. 06. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED ORDER PRONOUNCED IN THE OPEN COURT ON 31 JANUARY, 2 018. SD/- SD/- (JASON P. BOAZ) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL M EMBER MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE. ITA.1151/BANG/2017 PAGE - 5 1. DATE OF DICTATION 2. , , DATE ON WHICH TYPED DRAFT IS PLACED BEFORE THE DICT ATING MEMBER .. 3. . / DATE ON WHICH THE APPROVED DRAFT COMES TO THE PS/SR .PS. 4. DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTAT ING MEMBER FOR PRONOUNCEMENT 5. . / . . DATE ON WHICH THE ORDER COMES BACK TO THE PS/SR.PS .. 6 DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. , IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. / DATE ON WHICH ORDER GOES FOR XEROX &ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DESPATCH SECTION FOR DESPATCH OF THE TRIBUNAL ORDER 13. DATE OF DESPATCH OF ORDER . ITA.1151/BANG/2017 PAGE - 6