2017 (12) TMI 814

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....n ITA No.2633/Ahd/2013, by proposing the following question, stated to be a substantial question of law: "Whether the Appellate Tribunal has erred in law and on facts by deleting the disallowance of Rs. 34,50,445/- made on account of fluctuation in rates on foreign exchange, from the deduction under section 10B?" 2. The assessment year is 2008-09 and the relevant accounting period is the previous year 2007-08. During the course of assessment proceedings, the Assessing Officer found that in the claim for deduction under section 10B of the Act, the assessee had considered Rs. 34,50,445/- being the exchange rate fluctuation as eligible for the claim for deduction under section 10B of the Act. The Assessing Officer was of the opinio....

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.... basis of accrual, would record sale consideration at the prevailing exchange rate on the quoted price for the exported goods in the foreign currency rates. If during the year of the export, the remission is made, the difference in the rate recorded in the accounts of the assessee and that eventually received by way of remission either positive or negative, would be duly adjusted. May be the accounting standards require that the same may be recorded in separate foreign exchange fluctuation account. Nevertheless, any deviation either positive or negative must have direct relation to the export actually made. Payment would be due to the assessee due to the factum of export. Current price of the goods so exported would also be predecided in th....

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....reign exchange as on the date of balance sheet was an item of expenditure under section 37(1) of the Act, notwithstanding that the liability had not been discharged in the year in which the fluctuation in the rate of foreign exchange occurred. 8. Section 10B of the Act provides for deduction of such profits and gains as are derived by a hundred per cent exportoriented undertaking from the export of articles or things or computer software for the period and subject to the conditions stipulated there under. Therefore, the deduction is permissible if such profits and gains as are derived from the export of articles and things. As held in the above decision, the exact remittance in connection with such export would depend on the precise exch....