TaxTMI 
TaxTMI 
2021 (6) TMI 894
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.... in law, whether the Ld. CIT(A) was justified in deleting the addition made on account of gains from cancellation of forward contract without appreciating the fact that the so-called asset could not be created not any foreign exchange loan was taken by the assessee for such assets. Therefore, the Assessing Officer has correctly treated the same as revenue receipt. 2. On the facts and circumstances of the facts and in law, whether the Ld. CIT(A) was justified in deleting the addition without appreciating the fact that reason/basis for which forward contract was undertaken remained unfulfilled; that rendered the whole transaction an adventure on the part of the assessee and therefore, gains from such transaction were treated rightly ....
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....e character of capital receipt. Thus, aggrieved by the order of ld. CIT(A), the Revenue has filed the present appeal before this Tribunal. 3. We have heard submission of Sh. O.P. Vaishnav learned Commissioner of Income-tax-departmental representative (ld. CIT-DR) for Revenue and Sh. Manish J Shah learned Counsel for the assessee. The ld. CIT-DR for Revenue supported the order of Assessing Officer (AO). The ld. CIT-DR for the revenue supported the order of the assessing officer. The ld. CIT-DR for the revenue further submits that the assessee before assessing officer relied on the order in its own in PCIT vs. Garden Silk Mills Ltd. (supra), observation in the said case are mere obiter. The forward contract was nothing but a right to make ....
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.... Sr.No. Particulars 1 Metalizers Topmet 2850 Hires 2 Slitters 3 Bopet Projects 5. The assessee decided to import the machinery and equipment against the foreign currency loan. In order to ensure and guard against the fluctuation in foreign currency, the assessee decided to enter into forward contract. However, due to certain adverse market environment and other limiting factors, the assessee decided to keep the expansion on hold and decided that forward exchange contract so made to be cancelled. On cancellation of such forward contract exchange contract, the assessee gained Rs. 3.22 Crore. The said gain is in the nature of capital receipt as the forward contract was made in furt....
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....rse market situation, the assessee postponed the said project and on cancellation of such foreign forward contract, the assessee earned gain of Rs. 3.22 crore. The reply of the assessee was not accepted by the assessing officer. The assessing officer held that forward contract was nothing but a right to make available foreign exchange at a particular rate irrespective of exchange rate at that point of time. The assessing officer further held that gain so earned cannot be treated in a character of capital asset because the assessee could use it for capital asset, raw material, or even just for making profit as evident in this case. The case law relied by the assessee in its own case for AY 1993-94 was not accepted by taking view that it was ....