TaxTMI 
TaxTMI 
2019 (11) TMI 1847
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....ed 20.02.2018 for the assessment year 2010-11 as per the grounds of appeal on record. 2. At the very outset, the Ld. AR of the assessee appraised the Bench that so far the ground Nos. 3 and 4 are concerned in the Revenue's appeal, they are conceding those grounds. That with regard to ground Nos. 1 and 2 which relates to the determination of ALP of foreign exchange income, the Ld. AR of the assessee stated that if these grounds are dismissed, in that scenario, cross objection filed by the assessee will become infructuous. 3. The Ld. DR conceded to the arguments put forth by the Ld. AR of the assessee. 4. Having heard the submissions of the parties herein since ground Nos.3 and 4 in the Revenue's appeal, the assessee concedes these grounds....
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....he inclusion of foreign exchange gain/loss in the operating revenue/costs of the assessee as well as that of the comparables. When we advert to the nature of such foreign exchange gain earned by the assessee, it has not been controverted by the ld. DR that the same is in relation to the trading items emanating from the international transactions. If the foreign exchange gain/loss directly results from the trading items, we fail to appreciate as to how such foreign exchange fluctuation gain/loss can be considered as non-operating. 7. The Special Bench of the Tribunal in ACIT Vs Prakash I. Shah (2008) 115 ITD 167 (Mum)(SB) has held that the gain due to fluctuations in the foreign exchange rate emanating from export is its integral part and....
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....on in other contexts, does not improve the case of the Department. Following the judgment in Principal Commissioner of Income Tax Vs. Ameriprise India Private Limited (ITA 206/2016) decided on 23.03.2016, holding foreign exchange gains earned by the assessee, which is in relation to trading items and emanating from international transactions, cannot be treated as non-operating losses and gains, the Hon'ble Delhi High Court in Pr. CIT VS. B.C. Management Services Pvt. Ltd. (2018) 403 ITR 45 (Del) reiterated held that foreign exchange fluctuation in relation to trading transactions, prior to safe harbor rules from 2013, is operating gain or loss. In view of the foregoing discussion, we are of the considered opinion that the amount of foreign ....