https://www.taxtmi.com/caselaws?id=218041 The appeal was filed by the Revenue against the order of the CIT(A)-III, Chennai, challenging the deletion of disallowance made towards exchange loss compensation. The Tribunal found that the agreement between the parties did not provide for compensation on account of exchange rate fluctuation, only for premature termination. Therefore, the payment made by the assessee for exchange loss compensation was not allowable as an expense. However, the termination fee paid by the assessee was allowed as an expenditure for the assessment year 2004-05, based on the principle that if a business liability arises in the accounting year, the deduction should be allowed even if quantified and discharged later. en-us Fri, 20 Jul 2012 00:00:00 +0530 Fri, 02 Nov 2012 09:49:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=218041 The appeal was filed by the Revenue against the order of the CIT(A)-III, Chennai, challenging the deletion of disallowance made towards exchange loss compensation. The Tribunal found that the agreement between the parties did not provide for compensation on account of exchange rate fluctuation, only for premature termination. Therefore, the payment made by the assessee for exchange loss compensation was not allowable as an expense. However, the termination fee paid by the assessee was allowed as an expenditure for the assessment year 2004-05, based on the principle that if a business liability arises in the accounting year, the deduction should be allowed even if quantified and discharged later. Case-Laws Income Tax Fri, 20 Jul 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=218041