Filco Trade Centre Pvt. Ltd., Ahmedabad V. The ACIT, Circle-4, Ahmedabad

ITA 52/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0634 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA SOON KABRA HEARING CONCLUD
• Assessee Lawyers: PRA JESH D SHAH
• Section: 143(3)

Judgement Text

ITA NO. 52 /AHD/201 4 ASSESSMENT YEAR: 200 9 - 10 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 52 /AHD/201 4 ASSESSMENT YEAR : 20 0 9 - 10 FILCO TRADE CENTRE PVT. LTD., .. ........... ....APPELLANT 11, 1 ST FLOOR, PURNESHWAR CHAMBER, O PP. DINESH HALL, B/H INCOME TA X, ASHRAM ROAD, AHMEDABAD 380 009. [ PAN : A A A CF 2884 N ] VS. A SSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 4 , AHMEDABAD. . ... ..... .. ..... RESPONDENT APPEARANCES BY PRA JESH D. SHAH FOR THE APPELLANT PRASOON KAB RA FOR THE RESPONDENT HEARING CONCLUDED ON: 30 /0 8 / 20 16 ORDER PRONOUNCED ON : 31 /08/ 20 16 O R D E R PER PRAMOD KUMAR , AM: BY WAY OF HIS APPEAL, WHICH IS DIRECTED AGAINST THE LEARNED CIT(A) S ORDER DATED 9 TH OCTOBER 2013 , IN THE MATTER O F ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE : - ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN CONFI RMING THE A D DITION OF RS.159,124/ - BEING LOSS SUFFERED ON ACCOUNT OF FLUCTUATION IN RATE OF FOREIGN EXCHANGE AS ON DATE OF BALANCE SHEET IN RESPECT OF CURRENT LIABILITY ON ACCOUNT OF IMPORT OF GOODS IN TRADE U/S 43A OF THE INCOME TAX ACT 1961 OVERLOOKING THE SUBMISSIONS TENDERED DURING THE COURSE OF APPELLATE ITA NO. 52 /AHD/201 4 ASSESSMENT YEAR: 200 9 - 10 PAGE 2 OF 3 HEARING. THE LD. CIT ( A ) OUGHT TO HAVE DELE T ED THE ADDITION RS.159,124/ - . 3. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE LIKE T HIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSING OFF ICER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.3,93,95 7 / - AS LOSS ON FLUCTUATION IN FOREIGN EXCHANGE BUT WHILE RS.2 , 34 , 833/ - , OUT OF THE S AID AMOUNT, REPRESENTS THE ACTUAL LOSS INCURRED BY THE ASSESSEE. THE BALANCE RS.1,59,124/ - WAS PROVISIONS M ADE IN RESPECT OF LOSS ON FLUCTUATION IN FOREIGN EXCHANGE RECEIPTS AS ON BALANCE SHEET DATE . THE ASSESSING OFFICER WAS OF THE VIEW T H A T THIS IS A NOTIONAL LOSS AND , THEREFORE , CANNOT BE ALLOWED . H E THUS DISALLOWED THIS AMOUNT OF RS.1 , 59 , 124/ - . AGGRIEVED , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE L EARNED CIT ( A ), BUT TH E L EARNED CIT ( A ) CONFIRMED THE ACTION OF THE A SSESSING OFFICER ON THE GROUND THAT IN TERMS OF SECTION 43A , ACTUAL PAYMENT OF INCREASED COST IS NECESSARY FOR MAKING ADJUSTMENTS IN C ASE OF ASSET S . ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACT OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. W E HAVE NOTED THAT THERE I S NO DISP U TE ABOUT THE FACT THAT WHEN LIABILITIES OF THE ASSESSEE ARE RECOMPUTED ON THE BASIS OF YEAR IN EXCHANGE RATE , A FURTHER PROVISION OF RS.1,59,124/ - IS REQUIRED. IN VIEW OF THE LAW LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASES OF OIL & NATU RAL GAS CORPORATION LIMITED VS. CIT, 189 TAXMAN 292 (SC) AND CIT, DELHI VS. WOODWARD GOVERNOR INDIA (P) LIMITED, 179 TAXMAN 326 (SC), SUCH A LOSS IS TO BE ALLOWED AS DEDUCTION IN COMPUTATION OF INCOME. L EARNED CIT(A) S ITA NO. 52 /AHD/201 4 ASSESSMENT YEAR: 200 9 - 10 PAGE 3 OF 3 RELIANCE ON SECTION 43A IS FULLY IR RELEVANT IN AS MUCH AS THAT QUESTION WOULD ARISE ONLY IN ADJUSTMENT OF THE COST OF ASSET AND IT DOES NOT GOVERN THE DEDUCTION TO BE GRANTED IN RESPECT OF PROVISIONS FOR LOSS ON FOREIGN EXCHANGE FLUCTUATION. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO D ELETE THE IMPUGNED DISALLOWANCE. 5. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 31 ST DAY OF AUGUST, 2016. SD/ - S D / - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCO UNTANT MEMBER) DATED: 31 ST DAY OF AUGUST ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AH MEDABAD