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2019 (4) TMI 2158 - HC - Income TaxIssues Involved: 1. Whether the Tribunal was justified in allowing the sum on account of delay of employee's contribution to ESIC and labour welfare contribution? 2. Whether the Tribunal was justified in allowing the Foreign Exchange Loss amounting to Rs. 2,56,75,159/- despite the CBDT Instruction No. 3 of 2010? Issue 1: The High Court stated that the issue of delay in employee's contribution to ESIC and labour welfare contribution was covered by a previous judgment. The Court referred to the case of CIT, (Central), Pune Vs. Ghatge Patil Transports Ltd [2015] 53 taxmann.com 141 (Bombay) where it was held that the Finance Act, 2003 equated deductions of tax, duty, cess, and fee with contributions to Employees' Welfare Funds. The Court mentioned that the decision of the Supreme Court in Alom Extrusions Ltd. applied to both employees' and employers' contributions. Consequently, the Court upheld the Tribunal's decision in favor of the assessee and against the revenue. Issue 2: Regarding the Foreign Exchange Loss, the High Court pointed out that the matter was already addressed in the case of CIT, Mumbai Vs. D. Chetan & Co [2016] 75 taxmann.com 300 (Bombay). In that case, it was determined that the hedging transactions entered into by the assessee were not speculative activities but were meant to cover against variations in foreign exchange rates. Therefore, the Court dismissed the Income Tax Appeal, affirming the Tribunal's decision on this issue.
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