2016 (12) TMI 1284

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.... in circumstances of the case, Ld. ITAT was correct in sustaining the deduction claimed by the assessee against the gain in repayment of foreign loans due to fluctuations in Foreign Exchange Rate? 2. Whether in a situation, where the advertisement and promotion expenses incurred by the assessee over its products also increases the brand popularity of its parent company, a part of such expenditure pertaining to the brand building of the parent company can be allowed to the assessee? 3. Whether the advertisement and promotion expenditure incurred by the assessee have an enduring benefit to the assessee as it creates tangible asset being goodwill, reputation and credibility and if yes, whether it can be treated as capital expenditure?" 2. S....

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.... emphasised the purpose of the loan and stated that if it was for the financing of fixed asset or working capital, for the ascertainment of it, all relevant circumstances and materials ought to be gone into. The assessee in that case had not produced any worthwhile material. In the circumstances, the Supreme Court held that the revenue's contentions were correct. 5. This Court is of the opinion that the decision in Woodward (supra) was correctly applied. Section 43A of the Income Tax Act, 1961 which applies in such circumstances, inter alia requires the treatment of foreign exchange fluctuation to follow the purpose of the borrowing; yet it also highlights that, "the amount by which the liability aforesaid is so increased or reduced during....