9911796707
TMI Blog2011 (3) TMI 1795X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 3. In this appeal the Revenue has deleted the addition made by the AO first in respect of additions on account of interest and bank charges, secondly on account of foreign exchange fluctuation loss and thirdly on account of profit on conversion of foreign currency. 4. The brief facts of the issue are that the AO while doing the scrutiny assessment disallowed the following : . Add : Interest 563209 Add : Bank charges 528435 Add: Foreign Exchange fluctuation loss 1038998 Add: Profit on conversion of foreign currency 210821 By observing that The nature of business of the assessee company stated to be processing and blending of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account : Uco bank IBB Branch closing valuation 416374 ICICI bank RNM Branch closing valuation 622624 1038998 The deposit amount in the EEFC a/c was ₹ 5,61,18,047/- as against opening balance of ₹ 87422825/-. It is mandatory for the exporter to maintain EEFC account for receipt of foreign currency out of export. But it is not mandatory to keep deposit foreign currency in the EEFC account being current account. The deposit in foreign currency is not a fixed deposit. Keeping amount in the EEFC account is also cannot be business of the assessee as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for non-business purposes. Moreover the income from interest during the year was for ₹ 24,57,582/- which fully set off of the interest paid during the year amounting to ₹ 5,63,209/-, after which there still remained income form interest of ₹ 18,94,373/-. I therefore do not find any justification in disallowing the interest payment of ₹ 5,62,209/-. The disallowance of the bank charges and the interest payment of ₹ 5,28,435/- and ₹ 5,63,209/- respectively are deleted. Ground No.1 is allowed. 4.3. I have carefully considered the facts and submissions of the appellant and find that the AO has taken a diagonally opposite view in this year in respect of the loss in the EEFC A/c due to valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n currency. 6.1. As regarding interest as well as bank charges, he contended that the year under consideration was already lull and inactivity for the business of the company and the bank charges were incurred in respect of the existing bank accounts of company, maintained for export business of the company. Therefore, the ld. CIT(A) is justified in deleting the same. 7. After hearing the rival submissions and on careful perusal of the material available on record, it is observed that the ld. CIT(A) has rightly deleted the addition on account of interest by observing that I do not find any justification for disallowing the bank charges. As regards interest, I find that there is no material to show that nay part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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