Visnukumar Traders Private Limited, CHENNAI V. ACIT, CHENNAI

ITA 895/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9310 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 03-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: N DEVANATHAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.895/MDS/2015 / ASSESSMENT YEAR : 2010-11 M/S VISNUKUMAR TRADERS P. LTD NO.112B POONAMALLEE HIGH ROAD CHENNAI 600 077 VS. THE ASSTT. COMMISSIONER O F INCOME-TAX COMPANY CIRCLE III(4) CHENNAI [PAN AABCV 1856 H ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI N. DEVANATHAN, ADVOCATE /RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / DATE OF HEARING : 03 - 03 - 2016 ! / DATE OF PRONOUNCEMENT : 12 - 05 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-11, CHENN AI, DATED 30.1.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SHRI N. DEVANATHAN, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS DIS ALLOWANCE OF FOREIGN EXCHANGE LOSS. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS SUFFERED LOSS DUE TO FOREIGN EXCHANGE FLUCTUATION W HICH WAS CLAIMED AS ITA NO. 895/15 :- 2 -: DEDUCTION. HOWEVER, THE ASSESSING OFFICER DISALLOW ED THE SAME. THE CIT(A) ALSO DISALLOWED THE CLAIM OF THE ASSESSEE O N THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY DETAILS. ACCOR DING TO THE LD. COUNSEL, FOREIGN EXCHANGE LOSS IS PART OF THE BUSIN ESS LOSS, THEREFORE, IT HAS TO BE ALLOWED. THE LD. COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS WO ODWARD GOVERNOR INDIA P. LTD., 312 ITR 254. 3. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD DEBITED FOREIGN EXCHANGE LOSS OF ` 7,41,383/- IN THE PROFIT & LOSS ACCOUNT. HOWEVER, THE SAME WAS NOT A DDED BACK IN THE COMPUTATION OF TOTAL INCOME. ON A QUERY FROM THE AS SESSING OFFICER WHY THE PROVISION FOR FOREIGN EXCHANGE LOSS COULD N OT BE DISALLOWED, THE ASSESSEE COULD NOT EXPLAIN THE SAME BY FILING NECESSARY MATERIAL, THEREFORE, THE ASSESSING OFFICER DISALLOWED THE FOR EIGN EXCHANGE LOSS TO THE EXTENT OF ` 7,41,383/-. IN THE ABSENCE OF ANY MATERIAL BEFORE THE CIT(A), THE CIT(A) HAS RIGHTLY CONFIRMED THE OR DER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE-COMPANY APPEARS TO HAVE MADE A PROVISION FOR FOREIGN EXCHAN GE LOSS TO THE ITA NO. 895/15 :- 3 -: EXTENT OF ` 7,41,383/-. IT IS NOT KNOWN IN RESPECT OF WHICH TR ANSACTION THE FOREIGN EXCHANGE LOSS HAS OCCURRED. THE CIT(A) HAS ALSO WITHOUT DISCUSSING THE FACTUAL ASPECT, SIMPLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. IN THE ABSENCE OF THE NATURE OF TRANSACTION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF FO REIGN EXCHANGE LOSS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFIC ER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH AND BRING ON RECORD THE NATURE OF TRANSACTION BETWEEN THE ASSESSEE AND THE OTHER PARTY IN WHICH THE LOSS HAS OCCURRED DUE TO FOREIGN EXCHANGE FLUCTUATI ON AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER CONSID ERING THE JUDGMENT OF THE APEX COURT IN THE CASE OF WOODWARD GOVERNOR INDIA P. LTD. (SUPRA). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 12 TH MAY, 2016 RD ITA NO. 895/15 :- 4 -: &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF