TaxTMI 
TaxTMI 
2019 (9) TMI 1751
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....g various disallowances/ additions, determined the total loss at Rs. 8,29,11,579/- under the normal provisions of the Act and Rs. 6,45,06,902/- under section 115JB of the Act. The assessee challenged the assessment order passed by the AO before the Ld. CIT(A). The Ld. CIT (A) after hearing the assessee allowed the appeal of the assessee and deleted the additions made by the AO. Against the said findings of the Ld. CIT(A), the revenue is in appeal before the Tribunal. 3. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- 1. "Whether in law and on the facts of the instant case, was the CIT (A) right in justifying that the assessee has option to offer exempt income as taxable. 2. "Whether in law and on the facts of the instant case, was the CIT (A) right in endorsing the presumption of own interest free funds thereby overlooking the changed law w.e.f. 2007-08 followed by introduction of rule 8D in 2008-09 that provides for a method of calculation as a result of which there would be no need to rely on any presumption of own funds. 3. Whether in law and on the facts of the instant case, was....
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....llant's submissions. I find that the Hon'ble ITAT in its order dated 07.08.2017 in ITA No. 4577/Mum/2015 for A.Y. 2011-12 had observed and held as under:- "3. We have heard both the Counsel and perused the records. We find that the Assessing Officer's reliance upon the decision of the Special Bench of ITAT in the case of Cheminvest Ltd. (supra) is misplaced. The said decision was reversed by the Hon'ble Delhi High Court. We find that the Hon'ble jurisdictional High Court has also followed the same proposition in the case of Pr.CIT v. Ballarpur Industries Ltd. TA No. 51 of 2016). The Hon'ble High Court has held as under. "By this income tax appeal the appellant - Department challenges the orders of the Commissioner of Income Tax and the Income Tax Appellate Tribunal, Nagpur. On hearing the learned Counsel for the Department and on perusal of the impugned orders, it appears that both the Authorities have recorded a clear finding of fact that there was no exempt income earned by the assessee. While holding so, the Authorities relied on judgment of the Delhi High Court in Income Tax Appeal No. 749/2014, which holds that the expression "does not form....
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....nterfere with the findings of the Ld. CIT(A). Hence, we uphold the decision of the Ld. CIT (A) and dismiss ground No 1 to 3 of the revenue's appeal. 8. Vide ground No 4 the revenue has challenged the Action of the Ld. CIT (A) in deleting the addition made by the AO on account of corporate guarantee commission. The Ld. DR relying on the findings of the AO submitted that the assessee received guarantee commission of Rs. 4,98,20/- from M/s. Finns Frozen Foods (India) Ltd. as the assessee company had executed corporate guarantee in favour of Bank of Maharashtra and charged commission @0.75%. The commission charged by the assessee company is not reasonable in view of the fact that Allahabad Bank charges commission @3% of guarantee amount up to Rs. 10 crore. Since, the commission charged by the assessee company was not reasonable, the AO had rightly estimated @ 3% of the amount of guarantee. 9. On the other hand, the Ld. counsel for the assessee supporting the findings of the Ld. CIT(A), submitted that this issue is covered in favour of the assessee by the order of the Tribunal in assessee's own case for the assessment year 2011-12. Since, the Ld. CIT (A) has decided this....
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.... Tribunal rendered in assessee's case referred above. The revenue has not pointed out any change in the facts and the circumstances of the present case. We, therefore do not find any reason to interfere with the findings of the Ld. CIT (A) which is in accordance with the decision of the coordinate Bench. Hence, we uphold the findings of the Ld. CIT (A) and dismiss this ground of appeal of the revenue and further direct the AO to delete the addition. 12. Vide ground No 5 the revenue has challenged the Action of the Ld. CIT (A) in deleting the addition made by the AO on account of loss of foreign exchange by holding that the questioned transaction is not a speculative loss but is allowable as business loss u/s 37 of the Act. The Ld. DR strongly supporting the findings of the AO submitted that since the assessee had claimed the hedging losses of foreign exchange forward contracts as business losses without justifying its claim, the Ld. CIT (A) ought to have confirmed the addition made by the AO. On the other hand, the Ld. counsel for the assessee supporting the findings of the Ld. CIT(A), submitted that this issue is covered in favour of the assessee by the order of the Tribunal in....
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....y flawed as it was based on a factually incorrect assumption that the assessee not being dealer in foreign exchange, its forward contracts were only for foreign exchange which were settled without delivery thereof. The RBI has permitted importers and exporters to enter into foreign exchange forward contracts with the banks in respect of its export orders. In the case on hand the assessee entered into foreign exchange export contracts with banks to the extent of its export orders; which means every foreign exchange forward contract is against a specific export order. in this factual matrix, it is clear that the assessee did not deal in foreign exchange, but entered into foreign exchange forward contract with banks to safeguard itself against possible foreign exchange losses on account of export sale proceeds to be received. 5.3.3 We concur with the view of the learned CIT (A) in the impugned order that the facts and circumstances of the case establish that the proviso (a) to section 43(5) of the Act is squarely applicable in the case on hand since the foreign exchange forward contracts entered into by the assessee with banks, in the course of its manufacturing and export bu....
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.... purchase or sale of a commodity is settled otherwise than by the actual delivery or transfer of such commodity. However, as stated above, the assessee was not a dealer in foreign exchange. The assessee was an exporter of cotton. In order to hedge against losses, the assessee had booked foreign exchange in the forward market with the bank. However, the export contracts entered into by the assessee for export of cotton in some cases failed. In the circumstances, the assessee was entitled to claim deduction in respect of Rs. 13.50 lakhs as a business loss. This matter is squarely covered by the judgment of the Calcutta High Court. with which we agree, in the case of CIT v. Soorajmull Nagarmull (1981)22 CTR Cal) 8: (1981) 129 ITR 169 (Cal)". 5.3.5 Taking into account the facts and circumstances of the case as discussed above and the judicial pronouncement referred to (supra), we are of the considered view that the orders of the learned CIT (A) for assessment years 2009-10 and 2010-11 holding that foreign exchange losses of 16,72,65,011/- and 6,53,06,057/- for assessment year's 2009- 10 and 2010-11 respectively were business losses and directing the AO to allow the sa....