2025 (11) TMI 268

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....ment proceedings, assessee submitted that the sundry creditors were outstanding in respect of goods imported by the assessee during the preceding FY but no purchase was made during FY 2012-13 and 2013-14. In view of the above facts, the matter was remanded to the AO. 3. During revision proceedings, it was observed that there were no outstanding in respect of goods imported by the assessee, however assessee has claimed foreign exchange loss of Rs. 1,19,56,753/- without doing any business transaction. Accordingly, order passed u/s 143(3) is found to be erroneous so far as it is prejudicial to the interest of the Revenue and accordingly notice u/s 263 of the Act. In response, assessee has submitted that it has imported goods during FY 2009-10 in respect of which the amount was payable as on 31.03.2014 on which the exchange loss was claimed and submitted the following information :- Sl. No. Particulars Amount (Rs.) 1. Benchmark Resources Limited RM, 601-2, Wai Fund Plaza, 664 Nathan Rd., Mongkok, Kowloon, Hong Kong China 7,48,80,075/- 2. Mini Wood Traders Limited Flat C, 13/F, 55, Tong Mei Road, Tai Kok Tsui, Kowloon, Hong Kong 31,24,440/- 4. Based on t....

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....es. Since, the above said payment of outstanding was not made, assessee has made calculation of difference in foreign exchange rate in Dollar term as shown in the table above and accordingly, it debited an amount of Rs. 1,19,56,753/- in its P&L account as loss on foreign currency fluctuation. Upon analysis of the details filed by the assessee, it is noted that the said liability on account of which the assessee company has calculated is doubtful in view of the enquiry proceedings of DRI in the case and its outcome is not ascertainable. Secondly, assessee company has to make accounting of the above foreign exchange loss or exchange gain on regular basis, which assessee has not followed as it is seen that in some year it has claimed loss and in some year it has shown gain and in some year no loss or gain has been shown by the assessee as per ITR filed by the assessee company. Further, the amount of exchange rate calculated as on 31.03.2014 is also found incorrect as the value of I US Dollar as on 31.03.2013 was Rs. 54.285 but the assessee has shown this as Rs. 44.687/-, Similarly the value of 1 US Dollar as on 31.03.2014 was Rs. 59,685/-. If at all any foreign exchange loss needs to ....

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....eightage in this contentions of the Appellant Assessee company for the following reasons mentioned hereinafter: a. The Appellant Assessee company has not shown or submitted any roof or document relating to the enquiry being conducted by the agency DRI or the stage of the inquiry. b. The Appellant Assessee company has not provided the date of seizure of original Bills by the said agency i.e. DRI, in order to substantiate its claim that, it could not get any time to pay-off these bills of import as import related payments are to be made not later than six months, as per the RBI guidelines. c. The Appellant assessee company has not given any proof or document in support of its claim that, the exchange /related copy of the Bill of Entry of these imports have been seized by the DRI. d. The Appellant assessee company have not provided any documents or proofs related to stand of the overseas supplier regarding non-payment of nearly eight lakh Dollors/USD for nearly 5 years. The action of DRI on these bills and non-payment of these import bills for nearly 5 years are serious facts and the presence of dubious Bills or transactions cannot be denie....

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....nge loss stating that the liability to pay was not confirmed ignoring the fact that the non-payment of liability was on account of reasons beyond the control of the assessee. 5. On the facts and circumstances of the case, NFAC has erred, both of facts and in law, in confirming the addition stating that the US Dollar rates adopted by the assessee were not proper rejecting the evidences brought on record by the assessee." 10. At the time of hearing, ld. AR submitted that assessee has purchased certain machineries from vendors of Hongkong, China in AYs 2010-11 and 2011-12. She submitted that due to some issue with the DRI, the assessee was not able to make the payment during this year. She submitted that since assessee was carrying the liability in its books of account as per the ICAI accounting standard, assessee has to record outstanding amount as per the existing exchange rate. Therefore, the assessee has duly followed the accounting standard and recorded the outstanding amount in Indian currency as per the current exchange rate. Any loss or gain in respect of foreign fluctuation are being booked in the respective assessment year in the past. Further she brought to our ....