DCIT CIR 2(2), MUMBAI V. PUDUMJEE INDUSTRIES LTD ( FORMERLY KNOWN AS PUDUMJEE AGRO INDUSTRIES LTD), MUMBAI

ITA 1538/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7540 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1999-2000
• Appeal Filed On: 06-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: C A GULANIKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI. R.V. EASWAR, SENIOR VICE-PRESIDENT AND SHRI. T.R. SOOD, ACCOUNTANT MEMBER I.T.A. NO. 1538/MUM/2009 (ASSESSMENT YEAR: 1999-2000) DY. COMMISSIONER OF INCOME-TAX, CIRCLE - 2(2), AAYAKAR BHAVAN, 5 TH FLOOR, ROOM NO. 545, M.K. ROAD, MUMBAI 400 020 VS. M/S. PUDUMJEE INDUSTRIES LTD. (FORMERLY KNOWN AS PUDUMJEE AGRO INDUSTRIES LTD.) , 60, DR. V.B. GANDHI MARG, FORT, MUMBAI 400 023 PAN NO.: AAACP 0487 B (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI. D. SONGATE RESPONDENT BY : SHRI C. A. GULANIKAR O R D E R PER T.R. SOOD, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, MUM BAI, DATED 24.12.2008 AND RELATING TO THE ASSESSMENT YEAR 1999 -2000. 2. IN THIS APPEAL BY THE REVENUE VARIOUS GROUNDS HA VE BEEN RAISED BUT ON MERITS ONLY, ONE DISPUTE IS INVOLVED THAT IS THE DELETION OF ADDITION ON ACCOUNT OF LOSS INCURRED ON ACCOUNT OF RESTATING OF THE WORKING CAPITAL LIABILITY IN FOREIGN EXCHANGE. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THI S ISSUE IS SQUARELY COVERED AGAINST THE REVENUE BY THE DECISION OF THE TRIBUNAL, H BENCH, MUMBAI IN ITA NO.727/MUM/2002 IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 1998-99 WHEREIN, IT WAS HELD THAT A SSESSEE IS ENTITLED TO THE CLAIM OF NOTIONAL LOSS ON ACCOUNT OF RESTATING THE LIABILITY IN FOREIGN EXCHANGE FOR WORKING CAPITAL. WE, FURTHER FIND THAT RECENTLY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. WOODWARD GOVER NOR INDIA PVT. LTD. 312 ITR 254 (SC) HAS ALSO HELD THAT WHEN A LOAN IS TAKEN FOR REVENUE PURPOSES THEN ADDITIONAL LIABILITY ARISING ON ACCOU NT OF FLUCTUATION IN THE RATE OF EXCHANGE IS ALLOWABLE IN THE YEAR OF INCREA SE IN THE RATE. 4. RESPECTFULLY, FOLLOWING THE ABOVE DECISIONS WE D ECIDE THE ISSUE AGAINST THE REVENUE. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED ON THIS 22 ND DAY OF FEBRUARY, 2010 SD/- SD/- R.V. EASWAR T.R. SOOD (SR. VICE-PRESIDENT) (ACCOUNTANT MEMBER ) MUMBAI, DATED THE 22 ND FEBRUARY, 2010 NEELAM COPY TO: 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT, MUMBAI 4. THE CIT(A)-II, MUMBAI 5. THE DR, C BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI