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TMI Blog2013 (9) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal, Lucknow. The details of the Income Tax Appeals are as under:- ITA No. Assessment Year Judgment & order dated 82/2006 1982-83 06.10.2005 passed in ITANo.770/Alld/90; 80/2006 1983-84 06.10.2005 passed in ITA No.2587/Alld/91 81/2006 1985-86 06.10.2005 passed in ITA No.25/Alld/92 59/2008 1987-88 31.08.2007 passed in ITA No.25/Alld/1991 On 24.02.2006, a Coordinate Bench of this Court has admitted first three appeals on the following substantial questions of law:- ITA No.82 of 2006 "Whether on the facts and circumstances of the case, the respondents were justified in treating bifurcation of income of Rs.79,68,902 less exchange variation difference of Rs.37,58,732 under rule 115 of the Income Tax Act leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case, the respondents were justified in treating the exchange variation difference, arisen on account of translation of fixed assets by applying historic cost and hence a capital account, amount of Rs.2,29,07,221/- as part of taxable income instead of treating it as capital appreciation, and not taxable?" The facts and circumstances in all the appeals are identical. Hence, all the appeals are disposed of by this consolidated order for the sake of brevity. However, the dates, figures, etc. have been taken from the leading ITA No.82 of 2006 for the purpose of adjudication of the present appeals. The brief facts of the case are that the assessee is a Government Company owned by the State of U.P. It derives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has earned the foreign currency during the assessment years under consideration. He further submits that as per specific direction of the Tribunal regarding bifurcation of the income in three different heads was complied with and the assessee has already offered some amount for the purpose of taxation as per Rule 115 of the Income Tax Act which related to the translation of Iraqi Dinars into Indian rupees. A sum of Rs.42,01,470/- related to fixed assets and as per directions, the same could not have been taxed. The Tribunal has committed an error by holding that the appellant's order dated 02.02.1990 was passed by the CIT (A) despite the fact that the appellant-assessee had clearly established its case on the basis of irrebutable d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Atlas Cycle Industries vs. CIT 270 ITR 108, Punjab & Haryana as well as New India Industries Ltd. Vs. CIT 152 CTR 4 Gujrat. Thus, the fluctuation in rate of exchange amounts to capital expenditure as per the ratio laid down in the case of Seshasayee Board Ltd. Vs. CIT 237 ITR 488 Madras. Fluctuation in the rate of foreign currency (Section 43-A), the modification on actual cost is allowable as per the ratio laid down in the case of CIT Vs. Paper Products Ltd. 271 ITR 472 Delhi. It appears that the Tribunal in its impugned order has observed that:- "Admittedly, the assessee could not provide any details as directed by the Tribunal and at the time of hearing, the learned counsel clearly stated that it is not possible to furnish the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debited during the assessment year under consideration, so the same is allowable during the assessment year under consideration. For this purpose, he relied on the ration laid down in the case of CIT Vs. Patnaik & Co. Pvt. Ltd, (1983), 140 ITR 204 (Orr), where it was observed that the claim of the interest is allowable even though it pertains to the earlier year. On the other hand, Sri D.D.Chopra, learned counsel for the department has supported the impugned order. After hearing both the parties and on perusal of the record, it appears that the payment of the interest is genuine. Once the assessee has claimed the payment and debited the same then at least the same should have been allowed in any year. During the course of argument, lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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