Tribunal allows deduction under section 10B for gains from foreign exchange fluctuation

The Tribunal upheld the CIT(A)'s decision, allowing the deduction under section 10B for gains from foreign exchange fluctuation as part of the receipt of sale proceeds. The Tribunal emphasized that the gain was due to a change in the exchange rate upon receiving the sale proceeds, not from banking activities. Consequently, the Revenue's appeal against the disallowance of the deduction was dismissed.

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Issues involved: Appeal against disallowance of deduction u/s 10B on gains from foreign exchange fluctuation.

Summary:
1. The revenue appealed against the order disallowing deduction u/s 10B on gains from foreign exchange fluctuation.
2. The assessee claimed deduction on exchange rate fluctuation, which was disallowed by the Assessing Officer.
3. The CIT(A) allowed the deduction based on a previous tribunal decision regarding eligibility for deduction under section 80HHC.
4. The Assessee's representative cited a decision in a different case supporting the allowance of the deduction.
5. Both representatives agreed on the issue.
6. The Tribunal upheld the CIT(A)'s decision, stating that gains from exchange fluctuation are part of the receipt of sale proceeds and are eligible for deduction under section 10B.
7. The Tribunal emphasized that the gain was due to a change in the rate of exchange upon receiving the sale proceeds, not from depositing and withdrawing funds from a bank account.
8. The appeal of the Revenue was dismissed based on the above reasoning.

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