2009 (12) TMI 689 - HC - Income Tax

Exemption is Allowable on Exchange Fluctuation Gain, Interest Income and Reversal of Provision

Summary

Issues involved:
The issue involves the question of whether exemption is allowable on exchange fluctuation gain, interest income, and reversal of provision.

Exchange Fluctuation Gain:
The respondent received sale consideration in Dollars, which it was to receive on the date of sale. Due to fluctuation in conversion rate, the respondent received more in terms of rupee. The assessee argued that the exchange fluctuation benefit cannot be within the law laid down by the Apex Court in the case of M/s Liberty India Ltd.

Interest Income:
The substantial question of law sought to be raised pertains to whether exemption is allowable on interest income. The learned senior counsel for the Revenue submitted that the issue is covered in favor of the Revenue by virtue of the judgment of the Apex Court in the case of M/s Liberty India Ltd. v/s The Commissioner of Income Tax.

Reversal of Provision:
The issue also involves the reversal of provision. The appeal preferred by the Revenue for the assessment involving an identical question has already been dismissed on account of delay. After examining the issue, the submission made by Mr. Vyas, learned senior counsel for the Respondent, was found to deserve acceptance. The court did not find any substantial question of law arising in these appeals and therefore dismissed the appeals with no order as to costs.