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TMI Blog2015 (6) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... the original expense is allowable in full as per decision of B. Nagireddy v. CIT reported in [1991 (6) TMI 9 - MADRAS High Court]. - Decided against revenue. Disallowance of bank charges paid to guard against fluctuations in the foreign exchange rate for payment of loan taken for import of machineries - ITAT allowed the claim - Held that:- the consideration paid by the assessee to the authorized dealer of foreign exchange, which is the bank in this case, in order to obtain protection from fluctuation of foreign exchange rates is a revenue expenditure and the view taken by the learned Tribunal is correct. - Decided against revenue. - ITA No. 440 of 2006 - - - Dated:- 24-4-2015 - Girish Chandra Gupta And Arindam Sinha,JJ. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed facts and circumstances are that four several machines were developed by the assessee at a cost of ₹ 46,26,552/-. However, after the machines were developed the assessee found that the technology used had already become obsolete. Therefore, the machines were not put to use of manufacturing purposes. The assessee decided not to sell the machine as a scrap because doing so might enable the competitors to know technical knowhow developed by the assessee. Therefore, they decided to use the parts of the machines so developed by way of spare parts in future. This explanation was not acceptable to the assessing officer. He was of the opinion that the claim was not allowable for the following reasons:- The assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges for the value of these parts has not been made in the accounts and therefore, the original expense is allowable in full as per decision cited above. I have duly considered the submissions made. It is not the claim of the A.O. that the expenses have been doubtfully accounted for or that the expenses have not been incurred. The learned Tribunal has upheld that order of the CIT(Appeals). The question basically is a question of fact and when the learned Tribunal has concurred with the views expressed by the CIT (Appeals), we do not want to interfere with the said view as the view taken by them is a possible view. Therefore, the question no. (I) is answered in the negative and against the revenue. The second question itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the rate of exchange specified therein. Mr. Agarwal in support of his submission has also relied on a judgement of the Apex Court in the case of Assistant Commissioner of Income Tax v. Elecon Engineering Co. Ltd. reported in (2010) 322 ITR 20 (SC). Mr. Murarka, learned advocate appearing for the assessee/respondent drew our attention to a judgement of the Andhra Pradesh High court in the case of CIT v. Akkamamba Textiles Ltd. reported in (1979) 117 ITR 294 wherein it was held that guarantee commission paid by the assessee was a revenue expenditure. Mr. Agarwal in reply submitted that the bank charges which are sought to be treated as revenue expenditure is not on account of a guarantee commission. Therefore, the judgement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and has been debited as bank charges in the accounts of the assessee. In the light of the aforesaid facts, the judgement, cited by Mr. Agarwal far from helping him, militates against the proposition sought to be advanced by him as would appear from the following views expressed by the Apex Court:- Roll over charges represent the difference arising on account of change in foreign exchange rates. Roll over charges paid/received in respect of liabilities relating to the acquisition of fixed assets should be debited/credited to the asset in respect of which liability was incurred. However, roll over charges not relating to fixed assets should be charged to the profit and loss account. We are, in this case, not concerned with the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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