2020 (7) TMI 665 - HC - Income Tax

Loss of hedging of foreign currency receivable from exports - Loss on account of futures and options set off against the business profit - HELD THAT - The operative part of the Order of the learned Tribunal clearly shows that the matter has only been remanded to the Assessing Authority with similar directions given by the Tribunal in its earlier decision in the case of Aishwarya Company Private Limited 2015 (9) TMI 8 - ITAT CHENNAI Assessee submitted that while remanding the case to the Assessing Authority, the Tribunal has given certain directions and its views about the Exchange Fluctuations to be treated as speculative loss or business loss and therefore, it is not an open remand which is likely to prejudice the case of the Assessee while the Assessing Authority passes a fresh order upon such remand. Senior Standing Counsel Mr.T.Ravikumar appearing for the Respondent/Revenue has not seriously objected to the Assessing Authority passing fresh orders in accordance with law. No substantial question of law to be arising in the present case at this stage, requiring our consideration or pronouncement on the merits of the case, since the matter has only been remanded to the Assessing Authority.

Summary

Issues:
Appeal challenging the order of the Income Tax Appellate Tribunal regarding substantial questions of law for Assessment Year 2008-2009.

Analysis:
The Assessee raised questions on the sustainability of the Tribunal's order due to inconsistencies and illegalities, the Tribunal's failure to consider detailed submissions, and the differentiation between types of losses. The Tribunal remanded the matter to the Assessing Authority, following a similar decision in another case. The Tribunal's decision was based on the Calcutta High Court's judgment regarding speculative transactions. The Mumbai ITAT's decision in a different case emphasized the speculative nature of transactions exceeding turnover. The Tribunal directed the Assessing Officer to consider derivative transactions proportionate to export turnover and exclude premature cancellations from business loss calculations.

Further Details:
The Tribunal's decision was influenced by the Calcutta High Court's ruling on speculative transactions. The Mumbai ITAT's decision highlighted the importance of turnover in determining speculative nature. The Tribunal directed the Assessing Officer to compute derivative transactions in relation to export turnover and exclude premature cancellations from business loss calculations. The Assessee cited a Gujarat High Court judgment, but the Tribunal found it irrelevant. The issue was remitted to the Assessing Officer for fresh consideration based on previous judgments.

Conclusion:
The High Court disposed of the appeal without addressing the questions of law, allowing the Assessing Authority to pass fresh orders. The Assessee's objections were kept open for future reliance on relevant case laws. The Court emphasized that the Assessing Authority should make decisions independently, without being influenced by previous Tribunal observations.