KUNTAL GRANITES P.LTD, MUMBAI V. DCIT 5(2), MUMBAI

ITA 3106/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8674 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWA
• Assessee Lawyers: RA JAN A RUVALA
• Keywords: Opportunity of being heard
• Section: 143(3); 5(2); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3106/MUM/2015 ASSESSMENT YEAR: 2011-12 M/S. KUNTAL GRANITES PVT. LTD. VS. DCIT 5(2) GROUND FLOOR, ANCHORAGE, 5 TH FLOOR, AAYAKAR BHAVAN, 7 VACHHA GANDHI RD. GAMDEVI M.K. ROAD, CHURCHGATE MUMBAI 400 007 MUMBAI PAN NO. AAACK2174Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJAN A RUVALA, AR REVENUE BY: SHRI SWAPAN KUMAR BEPARI, DR DATE OF HEARING : 19/01/2 017 DATE OF PRONOUNCEMENT: 27.01.2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 10, MUMBAI AND ARISES OUT OF ORDER U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE SOLE GROUND RAISED BY THE ASSESSEE IN THIS A PPEAL IS THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT REINSTATEMENT OF VALUATION OF OUTSTANDING EXPORT BILLS TO THE EXTENT OF RS. 2,00, 421/- IS ONLY A PROVISION FOR LOSS AND ACTUAL AMOUNT OF LOSS WILL B E KNOWN ONLY WHEN OUTSTANDING BILLS ARE REALISED AND ACCORDINGLY THE SAME IS DISALLOWABLE. THUS IT IS SUBMITTED THAT THE ASSESSI NG OFFICER (AO) BE DIRECTED TO REDUCE THE ASSESSED INCOME BY RS. 2,00, 421/-. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE H AD DEBITED RS. 2,00,421/- ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATI ON LOSS. SINCE IN ITA NO. 3106/MUM/2015 2 EARLIER YEAR, THE SAME ADDITION WAS MADE, THE AO FO LLOWED THE RULE CONSISTENCY AND DISALLOWED RS. 2,00,421/-. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEAR NED CIT(A) AGAINST THE ABOVE ORDER OF THE AO. WE FIND THAT THE LEARNED CIT(A) HAS FOLLOWED HIS ORDER FOR THE A.Y. 2010-11 AND DIRECTE D THE AO THAT AFTER PROVIDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, HE SHOULD ALLOW ONLY REALISED LOSSES AND DISALLOW THE MARKED TO MARKET LOSSES CLAIMED BY THE ASSESSEE. 5. BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE R ELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE F OR THE A.Y. 2010-11 (ITA NO. 3078/M/2014). THE LEARNED DR ON THE OTHER HAND RELIED ON THE ORDER OF THE LEARNED CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT A SIMILAR ISSUE AR OSE BEFORE THE CO- ORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2010-11. THE TRIBUNAL FOLLOWED THE JUDGEMENT OF THE HON'BLE SUPR EME COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR INDIA PVT. LTD . (2009) 312 ITR 254 AND HELD AS UNDER: WE THEREFORE, HELD THAT THE SAID AMOUNT MAY BE ALLO WED AS DEDUCTION U/S 37(1) OF THE INCOME TAX ACT. THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THE SIMILAR ACCOUNTING PATTERN IN THE PREVIOUS YEARS. T HERE HAS BEEN CONSIDERATION WHETHER THE ASSESSEE AS SHOWING GAIN DU E TO EXCHANGE FLUCTUATIONS ON THE PENDING BILLS WHICH HAS BEEN CL AIMED AS INCOME IN THE RESPECTIVE ASSESSMENT YEARS. THE REVENUE CANNOT HEL D OF QUALITY AT THE SAME TIME ON ONE BERTH THE REVENUE HAS BEEN EXISTING THE GAINS DUE TO THE FOREIGN EXCHANGE FLUCTUATIONS AND ON THE OTHER SIDE WHICH DISA LLOW THE LOSS DUE TO THE FOREIGN EXCHANGE FLUCTUATIONS. 6.1 AS THE FACTS ARE SIMILAR, WE FOLLOW THE ORDER OF TH E CO- ORDINATE BENCH AND DIRECT THE AO TO REDUCE THE ASSE SSED INCOME BY RS. 2,00,421/-. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.01.2017 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; ITA NO. 3106/MUM/2015 3 DATED: 27.01.2017 BISWAJIT, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI