2021 (10) TMI 821

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....,29,216/- relatable exchange fluctuations in respect of assets acquired in India from the funds raised through foreign currency convertible bonds following its own order of earlier assessment years. 3. The assessment proceedings can be summarized by the following observations made by the AO in the Assessment Order:- "Disallowance of excessive deprecation claimed during current Assessment Year due to effect of disallowance of prorate exchange fluctuation loss pertaining to indigenous / domestic fixed assets made by CIT(A) for A.Y.2009-10 and assessing officer for A.Y.2010-11." 4. The CIT(A) confirmed the findings of the AO by observing as under :- "4.3 Since the facts are similar, being in agreement with the reasoning....

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....wards cost of the assets or repayment of money borrowed has not increased or decreased during the year. It is the submission of the learned counsel for the assessee that provisions of section 43A are not applicable to the case of the assessee. However, the conclusion that the liability due to exchange fluctuation has not increased during the year because the assets were acquired in earlier years runs contrary to the judgment of Hon'ble Supreme Court in the case of CIT v. Tata Iron and Steel co. Ltd (1998) 231 ITR 285, wherein, it was laid down that transaction of loan was distinct and independent transaction in comparison to acquisition of assets. 23.12. We find an identical issue had come up before the Tribunal in the case of ....

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....The assessee has also explained that Companies Amendment Rules also apply to the facts of the case because option is given to assessee and it provided "Where long term foreign currency monetary items relates to acquisition of depreciable capital asset, the same shall be added/deducted from the cost of the asset and shall be depreciated accordingly over the balance life of the asset.". It is not in dispute that assessee followed AS-11 regularly. In A.Y. 2010-2011 the Ld. CIT(A) allowed similar claim of the assessee, but, the Department did not file any appeal against the same Order. In A. Y. 2011-2012 though the Department filed appeal before the Tribunal on this issue on allowing depreciation, but, the same has been dismissed vide Order Dat....