2021 (5) TMI 205

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....the business of manufacture of cigarettes and trading of tobacco filed its return of income for the AY 2009-10 on 25/09/2009 declaring total income of Rs. 54,12,64,260/-. Scrutiny assessment was completed u/s. 143(3) of the Act on 30/11/2011 assessing the total taxable income of the assessee at Rs. 55,81,16,656/-. 2.1. Thereafter, the AO observed as under: "(a) The assessee has claimed foreign exchange fluctuation loss of Rs. 15,61,37,788/-. This includes loss of Rs. 4,54,05,100/- on account of debtors/creditors reinstatement. It is seen from the explanatory notes on debtors/creditors reinstatement that debtors/creditors are reinstated based on exchange rate prevailing at the end of the year and to reflect the correct position a....

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....37,788/- and b] R&D expenses of Rs. 2,33,36,809/- should not be disallowed being capital in nature. 2.4. After considering the submissions, which according to AO that there is nothing new in these submissions which were already submitted during the assessment proceedings, the AO completed the reassessment as under: 7. The assessee has claimed Rs. 15,61,37,788/- towards Foreign exchange fluctuation loss. This includes loss of Rs. 4,54,05,100/- on account of debtors/creditors reinstatement. It is seen from the explanatory notes on debtors/creditors reinstatement that debtors/creditors are reinstated based on exchange rate prevailing at the end of the year and to reflect the correct position as on date, this provision was created. ....

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....bjected to the action of the CIT(A) in quashing the reassessment order passed by the AO u/s. 147 of the Act, while the Ld. AR relied on the order of the CIT(A). 7. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. While quashing the order passed by the AO u/s. 147 of the Act, the CIT(A) observed as under: 1. There is no case to have a different opinion on the basis of the details called for during the course of original assessment proceedings and even on facts there is no case as most the of the expenses are recurring and incurred by the appellant year after year as evident from certain agreements filed. 2. While passing the original or....