2014 (4) TMI 856

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....r the Revenue and on going through the records placed before us, the present order is passed. 2. Revenue is on appeal as against the order passed by the Income Tax Appellate Tribunal and the Tax Case (Appeal) is admitted on the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in setting aside the order of the Commissioner of Income Tax and hold that loss arising out of fluctuation in foreign exchange for restatement liabilities as at the end of the financial year is not the contingent liability is valid in law?" 3. The assessment year under consideration is 2000-01. The assessee is engaged in the business of manufacture and sale of ....

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....ted the contention by citing the judgment of the Apex Court reported in 227 ITR 172 [Alkali Chemicals and Fertilizers Ltd.] and thus confirmed the proposal to treat the loss as contingent liability. 4. Aggrieved by this, the assessee went on appeal before the Income Tax Appellate Tribunal, which allowed the appeal filed by the assessee and following the decision of the Special Bench of the Tribunal in the case of Oil and Natural Gas Corporation vs. Deputy CIT reported in 83 ITD 151 (Del) holding that the loss amount from the restatement of foreign liabilities on account of exchange fluctuation was not a contingent liability but an ascertained liability as on a particular date. The Tribunal held that the assessee had taken a loan in foreg....