TaxTMI 
TaxTMI 
2026 (7) TMI 119
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....3(3) r.w.s. 147 of the Income Tax Act [hereinafter referred as "The Act"]. 2. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2004-05 on 29.10.2004 declaring income of Rs. 12,47,80,000/- u/s. 115JB of the Act. The original assessment was completed u/s. 143(3) of the Act on 29.12.2006 at total income of Rs. Nil and income of Rs. 13,92,69,769/- u/s. 115JB of the Act. Thereafter, the case was reopened by issue of notice u/s. 148 of the Act on 15.05.2007 for the following reasons: (a) extra ordinary items of Rs. 1370.26 lakhs was disallowed in the assessment order u/s. 143(3) instead of Rs. 1420.47 lakhs as insurance premium written back amounting to Rs. 50.21 lakhs was not taken into accoun....
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....e is uncalled for and be directed to be deleted 3. The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the disallowance of the foreign exchange variation amounting to 21,22,000/-accounted by the appellant on account of payment made against suppliers 4. The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the enhancement of the Book Profits computed under section. 115JB of the Income Tax Act, 1961 on account of foreign exchange variation amounting to 1,22,000/- considering the same as notional and unascertained liability 5. The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the disallowance of Rs.96,89,000....
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....re, added to income of the assessee in the reassessment proceeding. 7. We have heard the Ld. AR and the Ld. CIT-DR on this issue. The fact that the amount debited to account pertaining to extraordinary items was Rs. 1420.47 lakhs has not been denied by the assessee. The Ld. AR submitted that an addition of Rs. 1370.26 lakhs in respect of extraordinary items was already made in the original assessment, against which assessee had filed an appeal. According to the Ld. AR, if this addition was already deleted in the appeal, then the balance addition of Rs. 50.21 lakhs made in the reassessment should also be deleted. We have considered the request of the assessee. The actual status of the original addition of Rs. 1370.26 lakhs made in the ori....
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....SC)]. He further submitted that the AO was also not correct in adding this foreign exchange liability to the book profit u/s. 115JB of the Act. On the other hand, the Ld. CIT-DR supported the order of the lower authorities on this issue. 9. We have considered the rival submissions. As per the finding given by the AO and the Ld. CIT(A), it is found that the loss of Rs. 1.22 lakhs had arisen due to payment at a higher dollar rate of Rs. 48.30 in the subsequent year as against prevailing dollar rate of Rs. 44.22 as on 31.03.2004. Thus, the loss of Rs. 1.22 lakhs was not due to foreign exchange liability on the balance sheet date but this liability was created by payment at a higher rate on a date subsequent to balance sheet date. The Ld. CI....
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....a uniform rate of tax and there was no loss to revenue. He also relied upon the decision of Hon'ble Gujarat High Court in the case of Adani Enterprises Limited in Tax Appeal No. 573 of 2016 in this regard. Per contra, the Ld. CIT-DR, supported the order of the lower authorities. 11. We have considered the rival submissions. It is found that out of prior period expense of Rs. 96.89 lakhs, a sum of Rs. 94.75 lakhs was in respect of interest charges paid to financial institutions. As per provision of Section 43B of the Act, the assessee is eligible for claiming deduction of interest to the financial institutions, in the year of payment only. Thus, the interest payment of Rs. 94.75 lakhs made to financial institutions, which was part of prio....