2017 (6) TMI 1330

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....ment year 2013-14. Therefore, we heard both the appeals together and disposing of the same by this common order. 2. Let's first take the assessee's appeal in I.T.A. No.3344/Mds/2016. 3. The only issue arises for consideration in this appeal is disallowance of Rs. 36,33,334/- being the premium paid on forward contracts to cover the exchange fluctuations on the repayment of loan. 4. Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the assessee availed loan from State Bank of India for its project at Surajbari. The project was 1.5 MW. According to the Ld. representative, the assessee is admittedly engaged in the business of generation of wind energy. After availing loan from State Bank of India, the assesse....

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.... of this Tribunal in JSW Steel Ltd. v. ACIT (2010) 133 TTJ 742. 6. On the contrary, Shri Sreenivasan, the Ld. Departmental Representative, submitted that he is placing his reliance on the order of the CIT(Appeals). The Ld. D.R. further submitted that in view of Section 43A of the Income-tax Act, 1961 (in short 'the Act'), the CIT(Appeals) has rightly found that the loss suffered by the assessee in foreign exchange contracts was in the course of setting up of the plant, therefore, the loss has to be treated as capital loss, hence, it cannot be allowed. 7. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee admittedly borrowed loan in Indian currency from St....

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....f the project after commencement of its business. 9. Now, coming to Revenue's appeal in I.T.A. No.211/Mds/17, the only issue arises for consideration is disallowance of expenditure in earning the exempt income under Section 14A of the Act along with Rule 8D of Income-tax Rules, 1962. 10. Shri Sreenivasan, the Ld. Departmental Representative, submitted that the Assessing Officer disallowed Rs. 7,41,93,117/- under Section 14A of the Act. The CIT(Appeals) allowed the claim of the assessee on the ground that the assessee has not earned any exempt income. Referring to Rule 8D, the Ld. D.R. submitted that Income-tax Act does not say when there was no exempt income, the expenditure need not be disallowed. According to the Ld. D.R., irrespect....