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TMI Blog2021 (2) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... actual cost of imported assets acquired in foreign currency. This adjustment in the liability of foreign currency may result loss or gain to the assessee but the same needs to be adjusted with the capital assets as per the provisions of section 43A - Such loss arising to the assessee, is not deductible in the profit loss account. In the present case has secured such loss with respect to the liability in foreign currency which may arise at the time of payment by way of taking of forward contract. The assessee to secure the loss on account of foreign currency fluctuation has taken a forward contract and for which it has paid the premium which was claimed as revenue expenditure. Whether such premium paid by the assessee to secure the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kar Sharma, A.R Revenue by: Shri Virendra Singh, Sr.D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-1, Ahmedabad, dated 18/10/2017 arising in the matter of assessment order dated 21/12/2016 passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2014-2015. 2. The only issue raised by the assessee is that the learned CIT(A) erred in confirming the addition made by the AO for ₹ 64,16,539/- under section 37(1) of the Act in respect of forward contract premium expenses. 3. Briefly stated facts are that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal amount, of the foreign currency loan cannot be allowed as deduction. Thus the AO disallowed the same and added to the total income of the assessee. 4. Aggrieved assessee preferred an appeal to the learned CIT (A). 4.1 The assessee before the learned CIT (A) submitted that it has been incurring the expenses on the forward contracts for securing the foreign currency transaction consistently as per the accounting policy. 5. However the learned CIT (A) rejected the contention of the assessee and confirmed the order of the AO after having reliance on the order of Bangalore tribunal in the case of Archidply Industrial Ltd. Vs DCIT in ITA No. 1079/Bang/2011 vide order dated 17-7-2012. 6. Being aggrieved by the order of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability in foreign currency which may arise at the time of payment by way of taking of forward contract. The assessee to secure the loss on account of foreign currency fluctuation has taken a forward contract and for which it has paid the premium which was claimed as revenue expenditure. Now the question arises whether such premium paid by the assessee to secure the fluctuation in the foreign currency is subject matter of the provisions of section 43A of the Act. In our considered view the provisions of section 43A of the Act deals with the loss/gain with respect to the liability in foreign currency for the assets acquired from a country outside India. In other words, it does not deal with respect to the cost incurred by the assessee to se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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