2026 (7) TMI 1814

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Respondent : Mr. E. Elango, JCIT ORDER PER MANU KUMAR GIRI, JM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-1, (hereinafter referred to as "the Ld.CIT(A)"), Nashik, dated 11.02.2026 for the Assessment Year (hereinafter referred to as "AY") 2010-11. 2. Brief facts of the case are that the assessee, M/s. E....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....herefore, not allowable as a revenue expenditure. Accordingly, the AO disallowed the claim of Rs. 18,23,420/- and added the same to the total income. However, after set-off of brought forward losses, the assessed income remained at Nil, while book profit under section 115JB was determined at Rs. 57,06,863/-. 3. On appeal, the ld.CIT(A), after considering the assessment order, the grounds of app....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssue for consideration is whether the foreign exchange fluctuation loss of Rs. 18,23,420/- arising on year-end restatement of an External Commercial Borrowing obtained from the parent company, which was subsequently converted into equity shares, is allowable as a revenue deduction or is to be treated as a capital loss not allowable under the Act. 5. We have heard the rival submissions and perus....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... has been given by the parent company for the purpose of acquisition of capital asset and correspondingly the loan is in the capital field and the loss arising on account of restatement of the liability, which is in the capital field to be considered as capital nature and it is a capital loss cannot be considered as deduction while computing the income of assessee as a business expenditure." Th....