TaxTMI 
TaxTMI 
2020 (10) TMI 138
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....3 to 5, the grievance of the revenue is about deletion of disallowance of Rs. 77,97,732/- in A. Y. 2011 - 12 and Rs. 136,64,024/- in A. Y. 2012 - 13 being the project expenses capitalised by the AO and as per Ground No. 6, the grievance of the revenue is about deletion of disallowance of Rs. 235,60,711/- in A. Y. 2011 - 12 and Rs. 146,80,683/- in A. Y. 2012 - 13 being the interest on capital work in progress and in A. Y. 2012 - 13, this is one more grievance of the revenue that learned CIT (A) has erred in deleting the disallowance made by the AO of Rs. 39,32,28,754/- being Forex Loss by holding that the judgment of Hon'ble Apex Court rendered in the case of Woodward Governor India Pvt. Ltd., 312 ITR 254 is applicable in this regard. 3. Regarding all these issues, learned DR of the revenue supported the assessment orders and learned AR of the assessee supported the order of CIT (A). In course of hearing, the learned AR of the assessee also placed reliance on the judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Sabari Enterprises, 298 ITR 141 in respect of deletion of addition in respect of belated contribution of employees contribution to PF being disputed ....
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....he submitted that as per Para 10.8 of this tribunal order, the issue involved in A. Y. 2012 - 13 in respect of deletion of the disallowance of Rs. 39,32,28,754/- on account of Forex Loss was decided by the tribunal in favour of the assessee. At this juncture, the bench wanted to see the factual aspect as to how the Forex loan was utilised in the years when it was borrowed because there is no specific finding of the tribunal in Para 10.8 or any other Para in this regard. In reply, learned AR of the assessee submitted that these loans were borrowed in F. Y. 2005 - 06 to 2010 - 11 and he will submit the copy of audited accounts for these years to establish that these loans were not used for purchasing capital assets from abroad. Accordingly, he has filed the audited accounts for these years along with written submissions dated 04.09.2020. As per the same, an amount of Rs. 86,75,194/- was incurred on import of Capital Goods in F. Y. 2005 - 06 and it was pointed out that this amount is disclosed by the assessee in Note No. 12 (a) of the Audited Accounts for the year ended as on 31.03.2006 enclosed with the written submissions. It is also submitted that during the F. Y. 2006 - 07, an amo....
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.... case of CIT vs. Sabari Enterprises (Supra) and respectfully following the same, we decline to interfere in the order of CIT (A) on this issue and accordingly, Ground No. 2 in both years is rejected. 7. Regarding the issue involved in Ground Nos. 3 to 5 in both years, we find that this issue is squarely covered in favour of the assessee by the tribunal order rendered in assessee's own case for A. Y. 2013 - 14 & 2014 - 15 (Supra) and respectfully following the same, we decline to interfere in the order of CIT (A) on this issue also and accordingly, Ground Nos. 3 to 5 in both years are also rejected. 8. Regarding the issue involved in Ground No. 6 in both years, we find that this issue is squarely covered against the assessee by the tribunal orders rendered in assessee's own case for A. Y. 2010 - 11 and also for A. Y. 2013 - 14 & 2014 - 15 (Supra). Although reliance is placed by the learned AR of the assessee on several other judicial pronouncements but the facts in any two cases cannot be identical and when tribunal order in assessee's own case is available for immediately preceding year i.e. A. Y. 2010 - 11 and immediately succeeding years i.e. A. Y. 2013 - 14 & 2014 - 15, we fi....
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....to another currency, such profit or loss would ordinarily be a trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as a part of circulating capital embarked in the business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature". The ratio of the above decision is whether the gain or loss should be brought to tax or allowed as deduction depends upon whether the foreign currency transactions were carried on account of capital or revenue items. If the foreign currency transactions are undertaken on capital account, the gain made out of such transaction is outside ambit of taxation, of course subject to the application of provisions of section 43A of the Act. If the transactions undertaken are on account of revenue items, the gain is clearly taxable and so the loss also is clearly allowable. In the present case, in the assessment year 2013-2014, Rs. 18.12 crore represent the notional forex loss that is reinstatement of loan as on 31st March by marking to marketing rate and the balance amount is incurred on actual payment made during ....