TaxTMI 
TaxTMI 
2015 (9) TMI 1348
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....e Revenue relating to assessment year 2010-11 against the order passed under section 143(3) of the Act. Both the appeals filed by the Revenue relating to the same assessee and the cross objections filed by the assessee on similar issues were heard together and are disposed of by this consolidated order for the sake of convenience. 2. The issue raised by the Revenue in both the appeals relating to assessment years 2009-10 and 2010-11 are identical and the grounds of appeal in ITA 7328/Mum/2013 read as under: - "1. Whether n the facts and circumstances and in law, the Ld. CIT(A) has erred in holding that 'Mark to Market' loss of Rs. 66,51,21,162/-arising on valuation of forward exchange contracts on the closing date of accounting year i....
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....tently offered profit from foreign exchange differences in the earlier and later years to tax. Our attention was drawn to the order of the CIT(A) at page 26 and it was pointed out that only in the year under consideration there was loss on account of foreign exchange fluctuations whereas in each of the year there was foreign exchange gains. Another distinction drawn was that the Tribunal in M/s. S. Vinod Kumar Diamonds Pvt. Ltd. (sura) had addressed the issue whether the loss on foreign exchange fluctuations was speculation loss or business loss and the issue was not regarding allowability of mark to market loss. It was further pointed out that the Tribunal had also not considered the decision of the Apex Court in the case of Woodward Gover....
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....s export activity. Assessee was revaluing all the monitory assets and liabilities outstanding at the end of the year following AS-11 and recognizing the profit/loss during the year. It may be noted that for the year under consideration the assessee had booked loss on account of forward contract in foreign exchange. However, both in the preceding years and in the succeeding years assessee had gain on such forward contracts which was assessed as business income in the hands of the assessee. The AO rejected the claim of the assessee because it has entered into mark to market loss on forward exchange contracts and disallowed a sum of Rs. 66,51,21,162/-. The AO disallowed the claim of the assessee as the same had not been settled at the year end....
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....ches: i) ACIT vs. M/s. Monarch Gems ITA No. 2613/Mum/2013 dated 09.07.2014 ii) ACIT vs. M/s. Vimal Export ITA No. 6610/Mum/2012 dated 08.01.2014 iii) ACIT vs. M/s. Rupam Impex ITA No. 4008/Mum/2012 iv) ACIT vs. M/s. H. Dipak & Co. ITA No. 7629/Mum/2011 dated 30.04.2013 v) The Paper Products Ltd. vs. Addl. CIT ITA No. 7761/Mum/2012 dated 28.03.2014 vi) ECL Finance Ltd. vs. The DCIT ITA No. 6612/Mum/2011 dated 30.01.2013 vii) Reliance Communications Ltd. vs. CIT ITA No. 671/Mum/2013 dated 12.02.2014 viii) DCIT vs. M/s. Laguna Clothing Pvt. Ltd. ITA No. 6129/Mum/2012 dated 04.12.2013 9. The Tribunal, in M/s. H. Dipak & Co. ITA No. 7629/Mum/2011 relating to assessment year 2008-09, vide order dated 30.04.2013 observed as....
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....um.) has held that the loss incurred by the assessee on account of evaluation of the contract on the last day of the accounting year i.e. before the date of maturity of the forward contract, is allowable as deduction. In that view of the matter this loss of Rs. 7.14 crore representing difference of Re. 1 (Rs. 43 42) is liable to be allowed as deduction". 9. In the latest decision rendered on 9th January, 2013 in the case of Societe Generale (supra) cited by the ld. counsel for the assessee, the coordinate Bench of this Tribunal has again allowed a similar claim of the assessee for the loss of Rs. 9.16 crores on foreign exchange contracts outstanding as on 31-3-1998 holding that this issue is squarely covered in favour of the assessee by ....