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TMI Blog2014 (7) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... Impex [2013 (10) TMI 1364 - ITAT MUMBAI] - Decided in favour of the assessee. - ITA NO. 2613/MUM/2013 - - - Dated:- 9-7-2014 - SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER For the Appellant: Shri Jivan Lal Lavidiya For the Respondent: S/Shri K.K.Ved/I.A. Singh ORDER PER I.P.BANSAL, J.M, This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-27, Mumbai dated 18/01/2013 for assessment year 2009- 10. Grounds of appeal read as under: 1. Whether on the facts and circumstances and in law, the Ld. CIT(A) has erred in holding that Mark-to-Market loss of ₹ 85,86,096/- arising on re-valuation of forward contract agreements on the closing date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the accounting method where in year-end restatement of Mark to Market gain or loss in respect of all assets or liabilities denominated in foreign currency i.e. Debtors, Creditors, Loan Forward Contract being recognized as gain or loss in profit and loss account. In the process, the assessee in the present case has recognized gain of ₹ 1,01,94,740/- during the same year by restating the receivable at closing rate. Such gain is not realized. Actual gain may be different amount depending on the rate prevalent when it is actually realized. Similarly, it has recognized loss of ₹ 85,86.100/- by revaluating the same at the prevalent year and date. The said loss has been disallowed by the AO on the ground that it was for outst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laguna Clothing Pvt. Ltd. in ITA No.6129/Mum/2012 16-17 5. Unreported decision of Mumbai Bench of ITAT in the case of DCIT vs. ECL Finance Ltd., Edelwiss Capital Ltd. Vs. Addl. DCIT and Edelweiss Finance Investments Ltd. vs. DCIT in ITA No.6612/Mum/11, 7656/Mum/11, 6607/Mum/11 and 6609/Mum/11 18-26 6. Decision of Mumbai Bench of ITAT in the case of Reliance Industries Limited v/s. Commissioner of Income Tax reported in (2014) 147 ITD 323 27-35 7. Unreported decision of Mumbai Bench of ITAT in the case of Reliance Communications Ltd. vs. CIT in ITA No.671/Mum/2013 36- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized. According to Assessing Officer the loss claimed by the Assessee on forward exchange contracts is a notional loss. In this manner the loss was disallowed. Ld. CIT(A) relying on the following decisions has decided the issue in favour of assessee. 1. CIT vs. Woodward Governor India (P) Ltd. (294 ITR 451)(Del.); 2. CIT vs. Woodward Governor India (P) Ltd. (312 ITR 254)(SC); 3. ITAT Special Bench decision in the case of DCIT vs. Bank of Bahrain and Kuwait (ITA Nos.4404 1883/Mum/2004) and 4. ONGC vs. CIT (322 ITR 180)(SC) 1.2 Relying on the aforementioned decisions the ld. CIT(A) held that foreign exchange loss incurred by the Assessee during its normal course of business regarding restatement of forward contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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