2012 (2) TMI 511

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....change rate fluctuation had resulted in enhanced income and the Assessing Officer was right in holding that the income arising from the aforesaid fluctuation is assessable under the head 'income from other sources' and not as income from manufacturing or processing activity. 2. To understand the controversy we may reproduce the stand of the assessee before the Assessing Officer and the findings....

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....d as foreign exchange fluctuation as declared as income if proceeds are more, and loss if proceeds are lower. In both cases, actual foreign exchange proceeds realization gets reflected. There is no issue that this foreign exchange fluctuation declared in profit and loss account is income from other sources, other than as part of Export proceeds realized out of export sales and eligible for deducti....

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....d the said contention in detail and has recorded the finding that the respondent-assessee was a 100% export oriented unit. The export sales were recorded in the books of accounts on the date of sending of consignment. As the amount though payable in foreign currency was to be written in Indian Rupees, the exchange rate at that time was taken. The export proceeds in foreign currency were received a....

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....export transaction was complete and fruitified when the remittance of sale proceeds in foreign exchange was received and then converted into Indian Rupees. Accordingly necessary entries at that time were made to regularize and show the actual and true income. The aforesaid book entries cannot be compared to deposit of money in banks/FDRs and earning of interests. Examining the said aspect Bombay H....