2018 (7) TMI 2081

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....rred in granting relief to the assessee on the issue of loss on foreign exchange currency forward contracts entered into by it and not appreciating that assessee company failed to discharge the onus cast upon it by the statute to prove that the transactions in question were not of a speculative nature and thus the case of the assessee was not covered by proviso (a) of Section 43(5) of the Income Tax Act, 1961." 2. "Whether the Ld. CIT(A) was right in deciding on fresh facts not raised before the TPO without giving an opportunity to the TPO to examine the same. 3. "Whether the Ld. CIT(A) was right in accepting product dissimilarity claim to reject M/s.Gitanjali Export Corporation Ltd. even when TNMM requires only broad comp....

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.... issue is revolving around loss on foreign exchange forward contacts cancelled during the year, whether it is speculative in nature. Identical issue came up before ITAT in assessee's own case for A.Y. 2003-04 (ITA No. 69/Mum/2007) vide order dated 30.10.2009. The issue has been decided in favour of assessee as under: "28. The facts of the case in brief are that miscellaneous income of Rs. 9,18,088/-contained an amount of Ks.5,75,958/- which was received on account of cancellation of foreign exchange contract. The Assessing Officer treated the same as 'income from other sources' and did not allow benefit of deduction under section WA of the l.T. Act. In appeal, the CIT(A) upheld the action of the Assessing Officer. Aggri....

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....s by the CIT(A) as against speculation loss as treated by the Assessing Officer. When the matter came up before the Tribunal, the Tribunal following the decision of the Hon'ble Kolkata High Court and Hon'ble Bombay High Court, cited above, dismissed the ground raised by the Revenue. Following the same logic as held by the decision of the co-ordinate Bench of the Tribunal, we hold that Rs. 5,75,958/- on account of cancellation of foreign exchange contract in the course of business has to be treated as 'income from business' and consequently, the assessee is entitled to deduction under section 10A of the Act. In this view of the matter, the order of the CIT(A) is set aside and tlie ground raised by the assessee is allowed 6....

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....0. We have gone through the orders of the authorities below. The facts are contained in the order of CIT(A) in Para No. 6.6 and the relevant portions are reproduced hereunder: "6.6.2 The appellant has submitted that there is a significant product dissimilarity between the appellant and GECL rendering it liable to rejection as a comparable. The assessee has submitted that while GECL is into polished diamond export and the content of gold in the jewellery exported by GECL is negligible, the assesses is into export of jewellery with significant god content." "Following product comparison has been given by the appellant based on information in annual report: Particulars The appellant GECL Gold 39.59% 110% ....

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....ld be allowed, after giving effect to provisions of Section 70 & 71 of the Income Tax Act, 1961." 16. We have considered rival contentions and found that issue under consideration revolves around whether deduction u/s.10A is allowable before giving effect to provisions of Section 70 & 71 of the IT Act. This issue has been decided by the Hon'ble Bombay High Court in the case of CIT v. Black and Veatch Consulting Pvt. Ltd. reported in 348 ITR 72 (2012) (Bom) where Hon'ble Jurisdictional High Court has observed as under: ''The deduction under section 10A, in our view, has to be given effect to at the stage of computing the profits and gains of business. This is anterior to the application of the provisions of sectio....