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TMI Blog2017 (11) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IT Act, the assessee stands precluded to object the service of any notice in order to vitiate the re-assessment proceedings. Accordingly, this contention made by the assessee deserves to fail. The remaining issues regarding non-satisfaction of the conditions envisaged u/s. 147 to 151 and the notice being beyond the period of limitation, too have been decided by the first appellate authority with categorical observation that “case of the assessee was reopened by the AO u/s. 148 of the IT Act, 1961 after duly recording of the reasons. Notice u/s. 148 was issued and duly served upon the assessee on 23.03.2012 in response to which AR of the assessee company appeared before the AO from time to time. Since the notice u/s. 148 was issued on 23.03.2012 within four years from the end of the relevant A.Y. 2007-08, therefore, the notice being within the prescribed time limit the contention of the appellant that notice was barred by limitation is without any merit. No contrary material is laid on record on behalf of the assessee to discard the above findings of the ld. CIT(A). We, therefore, find no justification to interfere with the decision reached by first appellate authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability and not merely a contingent or a hypothetical liability. We accordingly observe that the AO is not justified to disallow the foreign exchange fluctuation loss in the instant case. As a result, the appeal of the assessee deserves to be partly allowed. - ITA No.4846/Del./2014 - - - Dated:- 31-10-2017 - Shri Bhavnesh Saini, Judicial Member And Shri L.P. Sahu, Accountant Member For The Appellant : Dr. Rakesh Gupta, Advocate and Sh. Somil Agarwal, Advocate For The Respondent : Ms. Renu Amitabh, CIT/DR ORDER Per L.P. Sahu, A.M.: This is an appeal filed by the assessee against the order dated 23.07.2014 of ld. CIT(A)-XVI, Delhi for the assessment year 2007-08 on the following grounds : 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143 (3) r.w.s. 147 without assuming jurisdiction as per law and without serving mandatory notices u/s 148, 143(2) and 142(1) as per law and without recording valid reasons in the eyes of law and without recording requisite satisfaction as per law and without obtaining requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order reveals that the issue regarding nonservice of notices u/s. 148, 143(2) and 142(1) upon the assessee was not pressed before the first appellate authority, as categorically mentioned in para 4.1.1 of the impugned order. This fact, categorically mentioned in the impugned order, is not proved to be false on behalf of the assessee. However, keeping in view the settled principle of law that legal ground can be raised at any stage, we are inclined to adjudicate on this objection of the assessee at this stage. As regards the service of notice u/s. 148, we observe that the ld. CIT(A) has categorically mentioned in the impugned order that the notice u/s. 148 was duly issued and served upon the assessee, against which no material is brought on record on behalf of the assessee. The assessee in the ground of appeal has also objected that notice u/s. 143(2) and 142(1) were also not served upon him. Though there is no material before us to ascertain whether such notices were issued and served, but it is discernible from the record that the assessee was cooperating with the department in response to notice u/s. 148. The assessee has also replied in response to this notice that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to non-accountal of interest recoverable from the clients in respect of closed projects as the Court/Arbitration cases were confirmed in favour of the Corporation in Nov., 2006 and Jan., 2007 for which demands were also raised during that period. Consequently, the Profit for the year is also understated by the same amount. 6. It was not accounted for in the books of account of the assessee. During the re-assessment proceedings, the AO observed that the assessee has raised a demand on the basis of court arbitration award confirmed in favour of the assessee during the financial year 2006-07, which were not recorded in the books of account of the assessee whereas the assessee has adopted mercantile system of accounting. Therefore, it was considered by the AO as the income of the current year whereas the assessee s contention was that it would be taxed in the year of receipt. The AO did not accept the contention of the assessee and added this amount to the total income of the assessee in the year under consideration. The ld. CIT(A) in appeal proceedings also confirmed the addition of the interest on accrual basis as observed by the Assessing Officer. 7. The ld. AR of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to prove whether it has been offered for tax or not during the subsequent year. Therefore, this aspect needs verification at the stage of Assessing Officer. Therefore, the matter is remanded to the AO to verify the same and act in the light of observations given in the body of this order above. Therefore, this ground of appeal is allowed for statistical purposes. 10. In respect of foreign exchange fluctuation loss, the assessee has debited ₹ 4235.48 lacs as a foreign exchange fluctuation loss on year to year basis as per accounting policy followed by the corporation. The foreign exchange losses were in respect of foreign construction projects undertaken by the assessee which were recoverable from the customers at the year end as on 31.03.2007. This amount which was to be received in foreign currency is required to be reinstated in Indian Currency as on the date of balance sheet in terms of accounting standard issued by ICAI. Therefore, there was loss on the balance sheet which has been debited by the assessee into profit and loss account. These aspects were examined by the Assessing Officer during the course of original assessment proceedings u/s. 143(3). The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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