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TMI Blog2020 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... increase or decrease as a result of foreign exchange fluctuation. The aforesaid adjustment has to be made even in a case where the payment was not actually made and the adjustments have to be made on the basis of the liability as on the last day of the previous year. By way of an amendment in the year 2002, the requirement of making of payment was inserted. The assessee even under unamended provision is entitled to benefit of the loss claimed by the assessee to the tune on account of settlement of forward contracts in the previous year, which was shown as loss while computing the taxable income of the assessee. We agree with the view taken by the Tribunal on this issue. Accordingly, the first substantial question of law is answered against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Sri.K.V.ARAVIND, ADV.) RESPONDENT (By Sri.A.SHANKAR, SENIOR COUNSEL FOR SRI.VENKATESH K. PANI, ADV.) JUDGMENT ALOK ARADHE J., This appeal which has been preferred under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act , for short) by the revenue has been admitted by a bench of this Court vide order dated 26.03.2012 on following substantial questions of law: (i) Whether the tribunal was correct in holding that a sum of ₹ 39,78,92,211/- should be treated as a depreciation loss as claimed by the assessee as arising due to forward contracts as these contracts stood terminated during the current assessment year and the corresponding amount was deemed to be added to the value of the assets even when these asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its interest from future foreign exchange fluctuation. It was further held that provisions of Section 43A of the Act do not apply to the case of the assessee. The loss claimed by the assessee to the tune of ₹ 39,78,92,211/- on account of settlement of forward contracts in the previous year, which was shown as loss while computing the taxable income of the assessee was disallowed by the Assessing Officer. 3. The aforesaid order passed by the Assessing Officer was upheld by the Commissioner of Income Tax (Appeals) by an order dated 10.07.2009. Being aggrieved, the assessee as well as the revenue filed appeals before the Income Tax Appellate Tribunal (hereinafter referred to as the tribunal for short). The Tribunal by order dated 31.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to acquire an asset before the change in the rate of exchange and since, in the instant case, no actual cost has been incurred by the assessee therefore, the assessee was not entitled to the benefit to unamended provision. It is further submitted that the Tribunal grossly erred in holding that the case of the assessee is covered by a decision in the case of ELECON ENGINEERING COMPANY LTD., SUPRA and in holding that amended provisions viz., Section 43A of the Act apply to the fact situation of the case. It is further submitted that the decision in the case of ELECON ENGINEERING COMPANY LTD., SUPRA was rendered in the peculiar facts of the case. In this connection, our attention has been invited to para 11 of the aforesaid decision. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on division bench decision of this court in COMMISSIONER OF INCOME TAX AND ANOTHER VS. JUPITER BIO-SCIENCE LTD. , AND COMMISSIONER OF INCOME-TAX AND ANOTHER VS. JUPITER BIO-SCIENCE LTD. , (2013) 352 ITR 113 (KARN) and STAR INDIA P. LTD. VS. COMMISSIONER OF CENTRAL EXCISE , (2006) 280 ITR 321 (SC). 6. We have considered the submissions made by learned counsel for the parties and have perused the record. Section 43A as it is stood before the amendment required an assessee to revalue the foreign exchange liability at the end of every previous year and provide for the increase or decrease as a result of foreign exchange fluctuation. The aforesaid adjustment has to be made even in a case where the payment was not actually made and the adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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