TaxTMI 
TaxTMI 
2016 (3) TMI 731
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....s common order for the sake of convenience. ITA No. 782/Kol/2012 A.Y 2005-06- Assessee's Appeal 3. The only issue to be decided in this appeal is as to whether, the Learned CIT(A) is justified in disallowing the foreign exchange fluctuation loss incurred by the assessee by restatement of foreign currency loan at the end of the year amounting to Rs. 21,25,864/- and at the time of actual repayment of loan in installments amounting to Rs. 75,07,500/-, in the facts and circumstances of the case. 3.1. The brief facts of this issue is that the assessee availed foreign currency loan (FCNR Term Loan) of 105,00,000 USD in the fag end of the financial year ended 31.3.2003 in order to prepay 14% Debentures for Rs. 50 crores and a sum of Rs. 49,87,76,250/- was shown as loan outstanding as on 31.3.2003. The said loan was subjected to restatement at the end of the year on 31.3.2004 which resulted in an exchange gain of Rs. 4,20,26,250/-. Pursuant to this restatement, the balance of loan outstanding as on 31.3.2004 was arrived at Rs. 45,67,50,000/-. The assessee did not offer the notional gain of Rs. 4,20,26,250/- as income in Asst Year 2004-05 which was however, added to income by t....
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....n facts as well as in law by confirming the disallowance of Rs. 75,07,500/- as capital in nature on pure assumption, without appreciating that the same was a realized loss arising out of foreign exchange fluctuation in respect of term loan taken from State Bank of India for its working capital fund requirements and was allowable u/s.37(1) of the Act. 3. Without prejudice to ground 2 (above), even assuming but not admitting, that such realized foreign exchange loss is termed as capital in nature and could not be allowed as revenue loss u/s.37(1) of the Act, the Ld.CIT(A) erred in not directing the Assessing Officer to allow depreciation on the capital asset, as presumably linked by the Assessing Officer to such realised foreign exchange loss. 4. That the appellant craves leave to add to and/or amend, alter, modify or rescind the grounds hereinabove before or at the hearing of the appeal. 3.2. The Learned AR fairly argued that the issue requires to be remanded back to the file of the Learned AO for redetermination as the lower authorities had not considered the decision of the Hon'ble Apex Court in the case of Woodward Governor (supra) which squarely covers the issue und....
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....39;s appeal for the Asst Year 2004-05 is pending before the Hon'ble Calcutta High Court wherein the notional exchange gain has not been subjected to tax, we deem it fit and appropriate, in the interest of justice and fair play, to direct the Learned AO, to decide the issue under appeal, in the light of the decision to be rendered by the Hon'ble Calcutta High Court and the directions contained in para (a) to (c) above. The assessee is at liberty to file fresh evidences and documents to substantiate its contentions before the Learned AO. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. ITA No. 930/Kol/2012 A.Y 2005-06 - Departmental appeal against section 143(3) order 4. At the outset, there is a delay in filing appeal by the revenue by 25 days and during the course of hearing, the Learned AR fairly agreed for condonation of the same. Hence we hold that the delay in filing the appeal by the revenue by 25 days is hereby condoned and the appeal of the revenue is admitted herein. 5. The only issue to be decided in the appeal of the revenue is as to whether while computing the book profits u/s 115JB of the Act, a sum of Rs. 18,86,02,6....
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.... year of creation of provisions, therefore, the same cannot be added back in the assessment year 2005-06 when the addition has been written back. Therefore, the addition of Rs. 18,86,02,604/- is hereby deleted. This ground of appeal is allowed." We find that the factual findings given by the Learned CIT(A) were not controverted by the revenue before us. Moreover, we are also convinced from the details filed in the paper book about the treatment of the provision for contingencies given by the assessee in various asst years and hence we do not find any infirmity in the order of the Learned CITA in this regard and hold that the assessee is entitled for reduction of provision for contingencies amounting to Rs. 18,86,02,604/- while computing book profits u/s 115JB in terms of clause (i) of Explanation 1 to section 115JB of the Act. Accordingly, the grounds raised by the revenue are dismissed. 6.3 In the result, the appeal of the revenue in ITA No. 930/Kol/2012 is dismissed. ITA No. 931/Kol/2012 - Department appeal against section 147 rws 143(3) order 7. At the outset, there is a delay in filing appeal by the revenue by 25 days and during the course of hearing, the Learned AR....
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.... been decided in favour of the assessee by this tribunal in assessee's own case in ITA No. 308/Kol/2007 dated 23.11.2007 for Asst Year 2003-04. The Learned AR further stated that similar disallowance was deleted by the Learned CIT(A) for Asst Years 2006-07 and 2007-08 against which no further appeals were preferred by the revenue. 8.3. We have heard the rival submissions and perused the materials available on record. We find from the facts of the case that the deposits and advances were given in the ordinary course of business and were lying in the books of the assessee company for quite a long time. The same were considered irrecoverable by the assessee and had written off the same in Asst Year 2005-06 and hence the same is to be considered as a trading loss u/s 28 of the Act. We hold that the Learned CIT(A) had rightly deleted the addition made in this regard. Accordingly, the ground no.1 raised by the revenue is dismissed. 9. The last ground to be decided in this appeal is as to whether the Learned CIT(A) is justified in disallowing the excess depreciation which was claimed by way of revised return in the earlier years having consequential impact, in the facts and circ....
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.... depreciation in Asst Year 2004-05 and subsequent appeals before this tribunal by the revenue have been dismissed. Further no appeal was filed by the revenue before this tribunal against the direction of the Learned CIT(A) in Asst Year 2004-05 and therefore the contention of the revenue that the matter is being filed before High Court in all the years is incorrect. Accordingly, the assessee pleaded before the Learned CIT(A) to direct the AO to restate the depreciation based on the WDV of the preceding years. 9.2. The Learned CIT(A) observed that this issue is squarely covered by the decisions of this tribunal in favour of the assessee for earlier years in ITA No. 2302, 2303 and 2356/Kol/2007 dated 29.2.2008 for the Asst years 2000-01, 2001-02 and 2002-03 respectively and held that the assessee is entitled for additional depreciation. The Learned CITA directed the Learned AO to verify the arithmetical correctness of the claim in the depreciation chart and directed to allow the claim of additional depreciation. Aggrieved, the revenue is in appeal before us on the following ground:- 2. That on the facts and circumstances of the case, Ld. CIT(A) erred in law as well as facts by d....