DCIT, Tiruppur V. SCN Garnents Pvt Limited, Tiruppur

ITA 374/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8202 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 18-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: S SWAMINATHAN
• Section: 43(5)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . !' , # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.374/MDS/2016 & '& /ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, TIRUPUR. V. M/S.SCM GARMENTS PVT.LIMITED, NO.57, V.O.C. NAGAR (SOUTH), VALAYANKADU, TIRUPUR 641 603. PAN: AAJCS 7850A ( () /APPELLANT) ( *+() /RESPONDENT) () , - /APPELLANT BY : SHRI PATHLAVATH PEERYA, CIT *+(),- /RESPONDENT BY : SHRI S.SWAMINATHAN, C.A. ,.# /DATE OF HEARING : 29.09.2016 /0' ,.# /DATE OF PRONOUNCEMENT : 28.10.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF CIT(A) -3, COIMBATORE DATED 16.11.2015 AND PERTAINS TO ASSESSM ENT YEAR 2011-12. 2. SHRI PATHLAVATH PEERYA, THE LEARNED REPRESENTATI VE FOR THE DEPARTMENT SUBMITTED THAT FOREIGN EXCHANGE DERIVATIVE LOSS TO THE EXTENT OF 2 I.T.A. NO.374/MDS/2016 RS.6,66,15,867/- WAS DISALLOWED BY THE ASSESSING OF FICER. HOWEVER, THE CIT(A) BY PLACING RELIANCE ON THE ORDER OF THIS TRIBUNAL I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11 ALLOWED THE CLAIM OF TH E ASSESSEE. ACCORDING TO THE LEARNED REPRESENTATIVE, THE LOSS SUFFERED BY TH E ASSESSEE IS A TRADING LOSS. THEREFORE, THE TRANSACTION IN QUESTION WOULD FALL W ITHIN THE DEFINITION OF SPECULATIVE TRANSACTION UNDER SECTION 43(5) OF THE ACT. 3. ON THE CONTRARY, SHRI S.SWAMINATHAN, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IN THE ASSESSEES OWN C ASE FOR THE ASSESSMENT YEAR 2010-11, THIS TRIBUNAL EXAMINED A SIMILAR TRAN SACTION OF FOREIGN EXCHANGE DERIVATIVE LOSS. THIS TRIBUNAL FOUND THAT THE ASSES SEE CAN CLAIM THE SAME WHILE COMPUTING THE TOTAL INCOME. THE CIT(A) IN FACT FOLL OWED THE ORDER OF THIS TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHT LY SUBMITTED BY THE LEARNED REPRESENTATIVE FOR THE ASSESSEE, THE CIT(A) BY PLAC ING HIS RELIANCE ON THE ORDER OF THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11 FOUND THAT THE FOREIGN EXCHANGE DERIVATIVE LOSS IS A NORMAL BUSINE SS LOSS. THEREFORE, IT HAS TO BE ALLOWED IN VIEW OF THE DECISION OF THIS COORDINA TE BENCH OF THIS TRIBUNAL. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 3 I.T.A. NO.374/MDS/2016 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DEDU CTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IA OF THE ACT. THE CIT(A) BY PLACING HIS RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE O F SHRI VELAYUDHASWAMY SPINNING MILLS P.LTD. ALLOWED THE CLAIM OF THE ASSE SSEE. WE HEARD SHRI PATHLAVATH PEERYA, THE LEARNED DEPARTMENT REPRESENT ATIVE AND ALSO SHRI S.SWAMINATHAN, THE LEARNED REPRESENTATIVE FOR THE A SSESSEE. THE CBDT HAS ALSO INSTRUCTED ITS OFFICERS NOT TO FILE ANY APPEAL WHENEVER IT IS COVERED BY THE JUDGMENT OF THE MADRAS HIGH COURT JUDGMENT. IT IS A LSO A FACT THAT RECENTLY THE APEX COURT DISMISSED THE SPECIAL LEAVE PETITION FIL ED BY THE DEPARTMENT. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE S AME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( . . !' ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) # /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE OCTOBER, 2016. SP. 4 I.T.A. NO.374/MDS/2016 , *.!2 32'. /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. 4. ( )/CIT(A) 4. 4. /CIT, 5. 25 *. /DR 6. & 6 /GF.