2020 (3) TMI 398

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.... order dated 26.03.2012 on following substantial questions of law: (i) Whether the tribunal was correct in holding that a sum of Rs. 39,78,92,211/- should be treated as a depreciation loss as claimed by the assessee as arising due to forward contracts as these contracts stood terminated during the current assessment year and the corresponding amount was deemed to be added to the value of the assets even when these assets had not been acquired or payments made? (ii) Whether the Tribunal was correct in proceeding to hold that no interest under Section 234B of the Act can be levied on the amount of tax payable under Section 115JB of the Act as clause (h) to Explanation 1 to Section 115JB of the Act was inserted with retrospec....

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.... as loss while computing the taxable income of the assessee was disallowed by the Assessing Officer. 3. The aforesaid order passed by the Assessing Officer was upheld by the Commissioner of Income Tax (Appeals) by an order dated 10.07.2009. Being aggrieved, the assessee as well as the revenue filed appeals before the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The Tribunal by order dated 31.05.2010 inter alia held that adjustment of the liability has to be allowed even in a case where the payment was not actually made. It was further held that such adjustment can be made only in the previous year, in which the foreign account was settled by the assessee. It was also held that case of the assessee ....

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....se of the assessee is covered by a decision in the case of ELECON ENGINEERING COMPANY LTD., SUPRA and in holding that amended provisions viz., Section 43A of the Act apply to the fact situation of the case. It is further submitted that the decision in the case of ELECON ENGINEERING COMPANY LTD., SUPRA was rendered in the peculiar facts of the case. In this connection, our attention has been invited to para 11 of the aforesaid decision. It is further submitted that interest under Section 234B of the Act was leviable on the amount of tax as explanation (h) to Section 115JB was incorporated with effect from 01.04.2007. In support of his submissions, reliance has been placed on the decision of the Supreme Court in 'ASSISTANT COMMISSIONER OF INC....

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.... 6. We have considered the submissions made by learned counsel for the parties and have perused the record. Section 43A as it is stood before the amendment required an assessee to revalue the foreign exchange liability at the end of every previous year and provide for the increase or decrease as a result of foreign exchange fluctuation. The aforesaid adjustment has to be made even in a case where the payment was not actually made and the adjustments have to be made on the basis of the liability as on the last day of the previous year. By way of an amendment in the year 2002, the requirement of making of payment was inserted. The assessee even under unamended provision is entitled to benefit of the loss claimed by the assessee to the tune....