TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 461
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....rder of the CIT(A) is opposed to law and facts of the case. 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in including export incentives in export sales to determine the profit margin of the assessee for making comparables under the TNMM method for the purpose of adjustment in determining arm's length price u/s. 92CA of the I.T. Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance on the loss on account of foreign exchange fluctuations inspite of the fact that the assessee failed to establish that the aforesaid loss was on account of hedging in foreign exchange and failed to adduce any evidence to ....
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....ll as non-AEs and the information obtained by the learned DR from the website of the assessee and placed on record before us shows that there were different types of bathrobes manufactured and exported by the assessee such as, Kimono, Hood, Shawl, Luxury, Hotels, Kids, Zipper etc. Even these products were further divided into sub types such as Kimono Piece Dyed and Kimono Piece Dyed Velour, Hood Piece Dyed and Hood Yam Dyed Ribbed, Hood with Embroidery and Kimono with Embroidery etc. In the comparable analysis done by applying CUP method, the assessee had not done the comparison between the price of each type of bathrobes but the average price of all the bathrobes supplied to the AEs and non-AEs was taken. In our opinion, such average price....
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....e AO/TPO in support of Revenue's case. The learned counsel for the assessee, on the other hand, has relied on the order of the learned CIT(Appeals) submitting that the DEPB benefit was rightly considered by him for the purpose of working out the profit margin of the assessee for comparability analysis as the same was also taken into account in working out the profit margins of the comparable cases. 17. After considering the rival submissions and perusing the relevant material on record, it is observed that the DEPB benefit was not taken into consideration by the AO/TPO for the purpose of working out the profit margin of the assessee whereas such benefit was taken into account in the comparable cases while working o....
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....propos Ground No.2, the AO disallowed a sum of Rs.25,75,804/- which was claimed by the assessee under the head "loss on foreign exchange fluctuation" (net). In view of no explanation furnished by the assessee in response to the show cause issued by the AO the amount has been disallowed. Aggrieved, assessee filed appeal before Ld. CIT(A). 5. Before Ld. CIT(A) it was submitted that an explanation was filed before AO vide letter dated 20/9/2010 in reference to the notice dated 9/9/2010, wherein as per para -2 of the letter explanation regarding foreign exchange fluctuation loss was filed. It may be mentioned here that the contents of the said letter relevant to the issue has been reproduced in the order of Ld. CIT(A). Along with said explanat....
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....at there was usually time lag between dated of invoices and date of realization of the proceeds and frequency and during such period there is usually some exchange fluctuation loss arising in the process of conversion of foreign currency is part of trading asset of the assessee and is therefore, trade loss. Such loss is in respect of circulating capital and is, therefore, revenue loss. In this view of the factual situation, Ld. CIT(A) relying on the following decisions has given relief to the assessee, against which department is aggrieved, hence has filed aforementioned ground of appeal. 1. Sutlej Cotton Mills Ltd. vs. CIT [1979] 116 ITR 1 (SC) 2. CIT vs. Harprasad & Co. (P.) Ltd. [1975] ....