TMI Blog2013 (10) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... (P.) Ltd. (2009 (4) TMI 4 - SUPREME COURT ), have held that the Assessee having maintained account on mercantile system of accounting, loss claimed by the Assessee on account fluctuation in the rate of foreign exchange as on the date of balance sheet in respect of loans taken for Revenue purpose is allowable as expenditure u/s. 37(1) notwithstanding the fact that liability has not been actually di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 1. Whether on the facts and circumstances of the case and in law, the Ld .CIT (A) has erred in holding that Market to market loss of ₹ 1,06,47,416/- arising on valuation of forward exchange contracts on the closing date of accounting year is not a notional loss and, therefore, allowable. 1.1 The Assessee is engaged in the business of export and import of diamonds. It has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2 Relying on the aforementioned decisions the ld. CIT(A) held that foreign exchange loss incurred by the Assessee during its normal course of business regarding restatement of forward contract obligations is in accordance with AS-11 and Assessee is claiming such loss in a consistent manner over the years. The gain earned by the Assessee regarding similar transactions was accepted and brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the rate of foreign exchange as on the date of balance sheet in respect of loans taken for Revenue purpose is allowable as expenditure u/s. 37(1) notwithstanding the fact that liability has not been actually discharged in the year in which the fluctuation rate of foreign exchange is accrued. Therefore, we find no infirmity in the order passed by the ld. CIT(A) and we decline to interfere. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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