2014 (10) TMI 846

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....r 2009-10. The only issue in the grounds of appeal of the assessee is that the Commissioner of Income-tax (Appeals) ought to have held that amount of Rs. 1,20,69,785 was an allowable deduction while computing income under the head "Profits and gains of business". 2. The brief facts are that the assessee filed return of income declaring income of Rs. 5,55,84,644 under the normal provisions of the Act and book profits of Rs. 3,67,66,847 under section 115JB of the Income-tax Act, 1961. The assessee debited in its profit and loss account loss on account of exchange rate fluctuation in respect of foreign currency term loan claimed as revenue loss. The Assessing Officer while computing the assessment disallowed the said exchange rate fluctuati....

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....oreign currency term loan and the banks have converted the existing term loans to foreign currency term loan. Counsel submits that the assessee has been accounting for exchange gain or loss on account of this foreign currency term loan in its books of account as revenue loss/gain consistently following the Accounting Standard 11. Counsel submits that in fact there is a gain in the assessment year 2008-09 which was offered as income. He further submits that even in the assessment year 2010-11 there is a gain which was offered to tax. Counsel for the assessee also submits that it is in the nature of interest as defined in section 2(22)(e) of the Act. 4. The Departmental representative vehemently supports the orders of the lower authorities....