Foreign Exchange Gains: Court Agrees with ITAT on Operating Income Inclusion, Dismisses Appeal for Lack of Legal Issues.

The HC upheld the ITAT's decision, finding no error in its treatment of foreign exchange gain/loss as operating income/loss. The exclusion of comparables, Infosys Ltd. and Wipro Technologies Services Ltd., was deemed appropriate due to the absence of segmental information. The appeal was dismissed as no substantial question of law was identified.

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Issues:
1. Whether the Tribunal erred in the treatment of foreign exchange gain/loss by categorizing it as operating income/operating lossRs.
2. Whether the Tribunal erred in law while excluding two comparables, Wipro Technologies Services Ltd. and Infosys LtdRs.

Issue 1:
The appellant/revenue sought to challenge the order passed by the Income Tax Appellate Tribunal regarding the treatment of foreign exchange gain/loss. It was noted that a previous decision had ruled against the appellant/revenue on this issue.

Issue 2:
Regarding the exclusion of comparables, specifically Infosys Ltd. and Wipro Technologies Services Ltd., it was discussed that Infosys Ltd. was excluded based on previous Tribunal rulings for AYs 2007-08 and 2008-09. The exclusion of Wipro Technologies Services Ltd. was supported by a decision of the Tribunal in a related case.

In conclusion, the High Court found no error in the Tribunal's approach in excluding the comparables based on the lack of segmental information. The Court also clarified that certain notifications and guidelines did not apply to the case due to the specific assessment year in question. Ultimately, the appeal was closed as no substantial question of law was found to arise for consideration.

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