TaxTMI 
TaxTMI 
2008 (4) TMI 465
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....n I. T. A. No. 1320 (Del) 2002 relevant for the assessment year 1998-99. The assessee had taken a loan in foreign exchange from the Citi Bank, UK. The total amount borrowed was about US $ 7 million. It appears that a part of the loan amount was utilized for purchase of capital equipment and that was included in capital work-in-progress. The remaining amount of US $ 3.67 million was utilized by the....
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....ibunal which was accepted and that is why the Revenue is before us. Our attention has been drawn to a decision of the Bombay High Court in CIT v. V. S. Dempo and Co. P. Ltd. [1994] 206 ITR 291. In that decision, the Bombay High Court set out tests for determining whether a loss on account of devaluation of the Indian rupee would be allowable as a business loss. The position was summed up by the Bo....
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....." 5. The conclusion noted by the Bombay High Court and which has been accepted by this court is to the effect that the purpose of acquisition of the loan is of no consequence but what is of consequence is the utilization of the amount at the time when the devaluation took place. In so far as the present case is concerned, the amount was utilized by the assessee for its business of money-lending ....