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TMI Blog2017 (2) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 195 of the Act. Accordingly, we dismiss the ground raised by the Revenue. Disallowance on account of loss of stock - Held that:- Tribunal in assessee’s own case for the assessment year 2008-09 wherein assessee’s claim for deduction u/s.36(1)(vii) r.w.s. 36 was allowed in favour of the assessee as held that the conditions laid down in section 36(1)(vii) r.w.s. 36(2) of the Act have been complied with. - Decided against revenue Disallowance on account of foreign exchange fluctuation loss - Held that:- This issue was discussed in great detail in the recent landmark ruling of Supreme Court in the case of ClT vs Woodward Governor India P. Ltd (2009 (4) TMI 4 - SUPREME COURT ) wherein observed where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be a trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as port of circulating capital embarked in the business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake in holding that the identity and creditworthiness of the creditor and genuineness of the transaction stood satisfactorily explained. In the absence of any credible material with the Revenue to disprove the findings of the CIT(A), we hereby affirm the same. Thus, on this aspect the Revenue fails. 5. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee s own case on the very same ground, we do not find any infirmity in the order of CIT(A) for deleting the addition made u/s.68 of the IT Act. 6. Disallowance made u/s.40a(ia) amounting to ₹ 5,79,95,330/- was restored back by the CIT(A) to the AO for verification and deciding afresh after having the following observation. I have considered the facts of the case. This issue has arisen in CIT(A)'s order of A.Y.2007-08 wherein in para 7.3 it is held as under: 7.3 I have considered the facts of the case as explained by the appellant in earlier paragraph giving the details of amount reimbursed and the head/purpose on account of which the amounts were reimbursed. In respect of reimbursement on account of salary cost the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HUL) from the payments to the Assessee towards warehousing and transport charges on account of damages, shortage and for delays etc. In this regard, the copies of credit notes issued to HUL along with the corresponding details was submitted before the authorities and is also summarized at page 226 para 3.2.4 of the Fact Sheet filed before us and is also enclosed at page 111-117 of the revised paper book filed on 2 March 2016. In view of this, it was submitted that looking at the hazards of carrying on business of transportation and warehousing, these losses are incidental and therefore allowable as a business loss. Without prejudice, the Assessee has also filed additional ground of including this as bad debt under section 36(1)(vii) of the Act. The gross income received from warehousing and transport charges of ₹ 82,36,59,877 has been offered as income and therefore short recovery / deduction by the customer is allowable as loss under section 28/37 of the Act or as a bad debt under section 36(1)(vii) of the Act. 9. We found that similar issue has been dealt by Tribunal in assessee s own case for the assessment year 2008-09 wherein assessee s claim for deduction u/s.36(1)(v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 65,40,000/-. The Assessing Officer disallowed the same on the ground that firstly the provisions were not allowable as business expenses and secondly the details thereof were not furnished by appellant. On the other hand the appellant has explained that the Assessing Officer had made addition without asking for details of such provision actually not a provision. The appellant has explained that the amount of ₹ 65,40,000/- was actually not a provision but represented the actual amounts receivable from the clients which could not be recovered and hence constituted a bad debt. The amount represented short recovery of transportation charges from the clients on account of losses occurred on account of retention, loss of stock and damage to stock whereas the transport invoices were accounted in the books of accounts for the whole amounts reflected in the transportation invoices. In the facts and circumstances, the amount wrongly claimed as provision of ₹ 65,40,000/- was actually a bad debt which was already included in the sale turnover of the appellant. In the facts and ITA 864/MUM/2012 (Assessment Year : 2008-09) circumstances the conditions laid down in sec. 36(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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