TaxTMI 
TaxTMI 
2016 (1) TMI 901
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....nt craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 2. The brief facts of the case, as recorded by the ld.AO/CIT(A), are as follows. The assessee filed its return of income declaring income of Rs.nil, on 30.11.2006. The same was processed u/s 143(1) and was selected for scrutiny. The assessee company is engaged in the business of manufacturing, trading and job work of men's suits, jackets and trousers. During the course of assessment proceedings, the assessee had produced books of account which have been test-checked. During the assessment proceedings, the ld. AO observed that the assessee had taken a foreign currency loan (ECB) of USD 3 million for three years towards working capital requirements, vide agreement dated 5.8.97. The agreement was entered into between KB & T Ltd. (earlier name of the assessee company) and Thakral Brothers Pte Ltd., Singapore(the copies of the said agreement and the RBI approval letter dated 1.7.97 in this regard are enclosed at pages 38 to 47 of the paper book). The ld. AO while making the disallowance of Rs. 28,45,070/-, observed that the details filed by the assessee show that the assessee....
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....the ECB funds had been fully utilized for meeting the working capital requirements. Therefore, the same is fully allowable u/s 37(1) of the Act since all conditions laid down in that section were fully met. Reliance has been placed on the following judicial decisions:- 1. CIT Vs Woodward Governor India (P) Ltd. (2007) 294 ITR 451 (Del). 2. Sutlej Cotton Mills Ltd. Vs CIT (1979) 116 ITR 1 (SC). 3. CIT Vs International Combustion (I) Pvt. Ltd. (1982) 137 ITR 184 (Cal.). 4. CIT Vs V.S. Dempo & Co. (P) Ltd. (1994) 206 ITR 291 (Bom). 5. CIT Vs IBM World Trade Corporation (1986) 161 ITR 673 (Bom.). 6. Oil & Natural Gas Corpn. Ltd. Vs DCIT (2002) 83 ITD 151 (Del.) (SB). I have considered the submissions of the appellant, the findings of the AO and the facts on record. Perusal of the facts on record show that the appellant is regularly following the mercantile basis of accounting and the treatment in the accounts of foreign exchange transactions is according to the Accounting Standards. As per the stated policy the revenue transactions in foreign currency are generally recorded at the exchange rate prevailing at the time of tra....
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....mport of raw material using closing rate of exchange. Any difference, loss or gain, arising on conversion of the said liability at the closing rate, should be recognized in the P&L a/c for the reporting period CIT Vs Woodward Governor India (Pvt.) Ltd & Others (2007) 210 CTR (Del) 354 "affirmed." The Hon'ble ITAT Spl. Bench (Delhi) in the case of ONGC Ltd. Vs DCIT 83 ITD 151 Delhi has observed as under: "Before concluding we would like to point out that the assessee's claim for loss arising as a result of fluctuation in foreign exchange rates on the closing day of the year has been disallowed by the AO, inter alia, on the ground that this liability was contingent liability and the loss was notional one. The main ingredient of a contingent liability is that it depends upon hoping of certain event. We are of the considered opinion that in the case of assessee, the "event" i. e. the change in the value of foreign currency has already taken place in the current year. Therefore, the loss incurred by the assessee is a fate accompli and not a notional one." After careful consideration of the facts of the case and the decisions of the Hon'ble Supreme ....
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....(A). During the appellate proceedings, the assessee submitted that the ld. AO has wrongly mentioned the addition at Rs. 5,73,791/-, being the opening WDV instead of Rs. 1,43,448/-, being the depreciation charged @ 25% of Rs. 5,73,791/-. The assessee submitted that the Customs Rules have been changed since long and the requirement of paying provisional duty and a security deposit till final assessment is made, has been removed from the statute. The assessee submitted before the Ld.CIT(A) that, the current position under customs law is that the goods can only be moved, out after paying the assessed customs duty. Therefore, the issue is lying dormant with the said authorities who are not inclined to take it up since their revenue is more than adequately covered by the said security deposit. It was submitted by the assessee before the ld.CIT(A) that a personnel was specially deputed by the assessee to get the matter settled with the Customs Department, which did not serve any purpose. Therefore, as a prudent businessman, it was decided not to spend any further cost in collecting the said refund and to right it off in the books. 6. The ld.CIT(A) observed that the right off was mad....