TaxTMI 
TaxTMI 
2018 (5) TMI 1587
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....aring its income at Rs. NIL. Book profit was computed at Rs. 96. 09 crores, as per the provisions of section 115 JB of the Act. Later on, a revised return was filed on 29/03/2014 where total income under the normal provisions and the MAT provisions remained the same. The Assessing Officer (AO) completed the assessment u/s. 143(3)on 14/01/2015, determining the income of the assessee at Rs. NIL under the normal provisions. He calculated book profit at Rs. 96. 45 crores u/s. 115 JB of the Act and determined the tax payable by the assessee at Rs. 17. 84 crores. 2. After going through the records, the CIT was of the opinion that the order passed by the AO was erroneous and prejudicial to the interest of revenue. He issued a notice u/s. 263 of t....
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....43A stipulated that factual payment of the decrease/and asked liability was a condition precedent for making adjustment in the carrying cost of the fixed assets, that following the Accounting Standards (AS)11, that the assessee restated its liability for purchase of assets in foreign currency at the FE rate prevailing on the last date of March, 2012, that the assessee had increased the that liability by a sum of Rs. 10, 33, 11, 458/-, that the liability was debited to the profit and loss account, that liability in question was disallowed by the assessee itself as it had not paid the liability till 31/03/2012, that the CIT directed the AO to disallow the loss while computing the book profit on the ground that it was contingent in nature, tha....
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....l and it reads as under: "4. Second Ground deals with upholding the disallowance of Rs. 4. 74 crores being loss incurred due to revaluation of open forward exchange contract. During the assessment proceedings the AO found that the assessee had entered into derivative agreement to swap term loans taken in Rs. against foreign currency, that it had debited "marked to market" losses of Rs. 4, 74, 24, 891/- to the P&L A/c. stating that the said liability had crystallied owing to the revaluation. The AO called for details about the transaction. After considering the same he held that it had entered into derivative transaction by swapping the loan, that the liability was paid in the subsequent year, that the notional loss of Rs. 4. 74 crores cou....
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.... of disallowance of loss on foreign exchange forward contract loss and not appreciating the fact that the said loss was a notional loss and hence cannot be allowed?" It was held by the Hon'ble Bombay High Court that question formulated by the department did not give rise to any substantial question of law. Considering the above, we decide second Ground of appeal in favour of the assessee. " We would also like to rely upon the case of D. Chetan and Co. (supra). In that matter, the assessee was engaged in the business of import and export of diamonds. For the AY. 2009-10, the assessee explained that the amount of Rs. 78. 10 lakhs claimed as loss was on account of hedging transactions entered into to safeguard variation in exchange rate....
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....onorable Bombay High Court, delivered in the case of Vinergy International Private Ltd. (supra) wherein the honorable court has held as under: "5. The grievance of the Revenue before us is that Instruction No. 3 of 2010 dated 31st March 2010 issued by the CBDT in respect of loss on account of foreign exchange derivatives is subsequent to the Apex Court's decision in Woodward Governer India private Ltd. (supra) and was not considered by the Tribunal. The instruction according to the Revenue would govern the issue. 6. In the present facts, we find that loss was not on account of derivatives but are in fact losses and gains in foreign exchange relating to purchase and sale transactions i. e. creditors and debtors outstanding as on 31st of....
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....venue. Alternatively, it was argued that the deduction u/s. 80 IC was in respect of power transmission division of the assessee whereas the voluntary transgressing adjustment was made in respect of telecom division for which deduction u/s. 80 IC was not claimed. 7. 1. It was brought over notice that in pursuance of the directions of the CIT the AO passed the order u/s. 143(3)r. w. s. 263 of the Act on 19/06/2017, wherein deduction under Chapter VIA, in respect of voluntary transfer pricing adjustment of Rs. 9. 86 lakhs, were withdrawn. It was stated that while computing the income under the normal provisions, the AO had determined the income of the assessee at Rs. NIL. The computation of book profit u/s. 115 JB was made as follow: ....