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TMI Blog2021 (12) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... Act') dated 30.12.2016. The Revenue has raised following grounds of appeal:- "i) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition of Rs. 1,91,51,938/- made on account of loss on exchange rate difference. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the assessee has suppressed loss and circulated black capital as the purchase rate at the time of purchase as well as the exchange rate at the time of payment are not taken in accordance with the prevailing Foreign Exchange Rate declared by the RBI for the date of Import and the date of payment 3. On the facts and in the circumstances of the case and in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of assessee has escaped to the extent of Rs. 1.91 Crores. 3. The Assessing Officer after recording the reasons issued notice under secetion148 of the Act on 29.03.2016. In response to notice under section 148 of the Act. The assessee filed his reply dated 13.04.2016 stating therein that original return filed on 30.09.2009 may be treated as return of income in response to notice under section 148 of the Act. The assessee required reasons recorded. The reasons recorded were provided to assessee. The Assessing Officer after serving statutory notices under section 143(2) and 142(1) proceeded for assessment. During the assessment Assessing Officer on the basis of reasons recorded issued show cause notice to the assessee and asked as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons recorded are wrong the assessee provided all the information. The assessee further stated that the cause of re-opening of his case that during the year assessee imported diamonds and debited Rs. 1.91 crores. The exchange rate adopted by the assessee on purchase of diamonds as per custom rate. If suppose the assessee takes the rate at RBI's prevailing rate then what will be effected is his purchase, either it will be increase or decrease and the net result will be no exchange difference because as and when he will make the payment the profit / loss on payment will be the exchange difference of that transaction. 5. The Ld. CIT(A) after considering the explanation of assessee held that the Assessing Officer passed the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is the rate taken by the bank during the day trading rate which almost varying closed to rate of RBI which the Assessing Officer adopted. The Ld. CIT(A) also recorded that all the purchases of assessee were settled during the year payment through buyer's credit, so the difference, if any, in booking rate at the time of purchases is automatic settled in the year itself. The allegation of Assessing Officer is that assessee suppressed the loss and circulated that money is baseless. The understanding is not proper for appreciating of accounting and the facts of the case. Aggrieved by the order of ld. CIT(A) the Revenue has filed this present appeal before this Tribunal. 6. None, appeared on behalf of assessee despite the service of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consideration of submission made by assessee. We find that re-opening on audit objection is not valid as it has been held by Hon'ble jurisdictional High Court in the case of Torrent Power of SEC Ltd Vs ACIT ( 392 ITR 330 Guj)/ [(2017) 77 taxmann.com 57 Gujarat]. However, we are conscious of the fact that issue is not raised before us for our consideration. 9. We further find that in the assessment order, the Assessing Officer made addition solely on the basis of his view that rate of dollar adopted by assessee at Rs. 40/- per dollar. However while making payment on the same date, the rate was taken at Rs. 41.92 per dollar which is not in accordance with rate prescribed by RBI. We find that during re-assessment the assessee explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r your honours other reason regarding no uniformity in the booking exchange rate at the time of payment in foreign exchange is wrong and not acceptable as all the payment rate are taken as per the actual payment done through bank. I enclose all the bank advice for the payments done during the year, if I am taking the payment rate on account of payment rate as booked by the bank then how a hypothetical rate can be taken by your honour." 10. We find that the Ld. CIT(A) after appreciation on the fact held that Assessing Officer made the addition without understanding the accounting and facts of the case. The Ld. CIT(A) held that assessee was right in booking the purchase at the custom rate which is fixed for some period as per trading norm an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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