TaxTMI 
TaxTMI 
2013 (11) TMI 1278
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....008 ITR no.229/1988. 3. The Assessee craves leave for the addition, modification, deletion of any of the grounds of appeal." I.T.A. No.-115/Del/2011 "1. On the facts and circumstances of the case and in law, the order of the CIT(A) is erroneous, perverse, illegal and against the provisions of law which is liable to be set aside. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.42,27,345/- on account of foreign exchange fluctuation loss. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,29,882/- u/s 14A. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.7,18,390/- on account of DEPB benefits accrued. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.26,16,800/- on account of cessation of trading liability. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance....
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....ted before Ld. CIT(A) that in the case of CIT vs Woodward Governor India Pvt. Ltd 312 ITR 254, the Hon'ble Supreme Court itself has pronounced that the exchange difference on account of purchase and sales recasted at the end of the financial year is not a notional loss or rather it is a revenue loss to be set off against the profits and loss of the year and moreover, the loss was booked in compliance of section 145(2) and accounting standards-11 which were mandatory. It was further submitted that word 'term expenditure' used in section 37 of the Act, covered an amount which is a loss even though the said amount has not gone out from the pocket of the assessee. It was also submitted that appellant has been consistently following mercantile system of book keeping from the very beginning and there is no change in the method of accounting and appellant had offered similar treatment to unrealized gains in earlier year. Reliance was also placed on the decision of Hon'ble Supreme Court in the case of Sutlej Cotton Mills Ltd. vs CIT 116 ITR 1 which held that profit or loss arising out of currency conversion would ordinarily be trading profit or loss, if it was held on revenue account or as....
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....0,71,707/- whereas the assessee had offered as income amounting to Rs.1,13,53,317/-. On inquiry, the difference was not explained by the assessee and, therefore, AO made an addition of Rs.7,18,390/- representing difference between DEPB accrued and DEPB declared. Before Ld. CIT(A), it was submitted by assessee that out of difference of Rs.7,18,390/-, Rs.2,38,210/- was on account of late claim of DEPB license, calculation mistake and wrong computation and the remaining of Rs.4,80,180/- represented the loss which the assessee had incurred on the sale of DEPB license. It was further submitted that practice of booking of DEPB license on accrual basis has been followed by the assessee company since it started dealing in EXIM Trade. The Ld. CIT(A) after going through the submissions of assessee held that the difference of Rs.2,38,210/- on account of DEPB license, calculation mistake and Rs.4,80,180/- loss on account of sale of DEPB licenses were explained and, therefore, the addition of Rs.7,18,390/- was deleted. (D) Addition on account of cessation of trading liability:- The AO observed that assessee had received an amount of Rs.26,16,800/- as advance from one custo....
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....4,96,352/- respectively, it was submitted that company could not deduct tax on these items due to some mistake and the same has now been deposited alongwith interest. It was also submitted that since it had deducted TDS and, therefore such expenses should be allowed to be deducted in this year only and reliance was placed on the case law of CIT vs M/s Vishnu Industrial Gases Pvt. Ltd. wherein it was held that since tax rate was same in the both years, the year in which deduction is allowable was not material. 4. Ld. CIT(A) accepted the contentions of assessee with respect to carriage outward and loading/unloading charges and deleted the additions of Rs.46,410/- and Rs.73,460/- but upheld the addition of Rs.17,38,374/- represented by Rs.12,42,022/- on account of inland haulage and Rs.4,96,352/- on account of clearing and forwarding charges. 5. Aggrieved with the above, Ld. CIT(A)'s order, both revenue and assessee has filed cross appeals. At the outset, the Ld. AR of the assessee filed written submissions and in assessee's appeal with respect to ground no-1, it was submitted that 5% disallowance out of administrative expenses amounting to Rs.1,32,892/- was on higher side havin....
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....ctuation loss was booked in the Profit & Loss Account, keeping in view accounting standards-11 which deals with treatment of loss/profit on account of foreign exchange fluctuation. Ld. AR also argued that the case of the assessee was squarely covered by the judgement of Hon'ble Supreme Court in the case of CIT vs Woodward Governor India Pvt. Ltd 2009-TIOL-50-SC-IT wherein it was held that unrealized forex fluctuation loss being in the nature of revenue should be allowed as deduction. To ground no-4 relating to disallowance on account of DEPB, Ld. AR argued that the difference has arisen due to calculation mistake and further loss on account of sale of DEPB license. In this respect, our attention was invited to pages 198 - 215 of the paper book wherein copies of sale bills of DEPB licenses were placed. Regarding difference in the amount of accrual of DEPB licenses and actual receipt of DEPB licenses, our attention was invited to pages 134 - 197 of paper book wherein the copies of DEPB licenses received were placed. In view of the above, it was argued that correct income after removing mistakes and after adjustment of loss on sale of DEPB licenses was offered. With regard to ground n....
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.... Special Bench in the case of Merlin Shipping & Transports vs ACIT 2012-TIOL-184-ITAT-VIZAG-SB, it was argued that provisions of 40A(i)(iii) were not applicable. However, from the records we find that there was no evidence which could lead us to arrive at a conclusion that nothing was payable as on 31st March. Ld. AR was not able to demonstrate that nothing was payable. Nor a copy of balance sheet or other document showing that nothing remained to be paid was submitted nor it is a part of record. Therefore, we deem it appropriate to remit this point to AO for re-adjudication. After verification of the claim of Ld. AR that nothing was payable, AO on the basis of such verification can allow the claim of the assessee as per law as laid down by Special Bench in the case of Merlin Shipping & Transport vs. CIT. 10. Now, we come to the appeal of the revenue. Ground no-1 is general and do not require any adjudication. Ground no-2 regarding deletion of addition on account of foreign exchange fluctuation is squarely covered by the judgement of Hon'ble Supreme Court in the case of CIT vs Woodward Governor India Pvt. Ltd wherein the Hon'ble Court had held that unrealized forex foreign excha....