https://www.taxtmi.com/caselaws?id=470015 Foreign exchange fluctuation losses on outstanding trade payables may qualify as revenue deductions where the taxpayer consistently follows the mercantile system, has treated corresponding gains as revenue in earlier years, and the liability remains connected with ordinary business transactions rather than a loan. The principle of consistency supports a uniform tax treatment across years, subject to Section 37(1) of the Income-tax Act, 1961. Interest on delayed payment of sales tax and service tax may also be deductible where it is compensatory, not penal or linked to an illegal purpose. On these principles, both deductions were treated as allowable and the Revenue's challenges were described as unsuccessful. en-us Mon, 10 Mar 2025 00:00:00 +0530 Mon, 13 Jul 2026 18:58:27 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=470015 Foreign exchange fluctuation losses on outstanding trade payables may qualify as revenue deductions where the taxpayer consistently follows the mercantile system, has treated corresponding gains as revenue in earlier years, and the liability remains connected with ordinary business transactions rather than a loan. The principle of consistency supports a uniform tax treatment across years, subject to Section 37(1) of the Income-tax Act, 1961. Interest on delayed payment of sales tax and service tax may also be deductible where it is compensatory, not penal or linked to an illegal purpose. On these principles, both deductions were treated as allowable and the Revenue's challenges were described as unsuccessful. Case-Laws Income Tax Mon, 10 Mar 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=470015