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TMI Blog2022 (9) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... AT:- ITAT in its order has referred to CIT(A)'s order and rightly recorded that the fluctuation in the rates of foreign exchange can result in either a gain or a loss because of value of the currency which appreciates or depreciates on the date of computation namely 31st March of the relevant accounting year. Placing reliance on CIT vs. Woodward Governor India (P) Limited [ 2009 (4) TMI 4 - SUPREME COURT] ITAT has held that the adjustment on account of foreign exchange rate fluctuation is required to be made to actual cost at the end of every year after amendment of Section 43A with effect from 01.04.2003 and upheld CIT(A)'s order that the gain arising on account of exchange fluctuation are not liable to tax as it is on the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider following substantial questions: 1. Whether in the facts and circumstances of the case, the Tribunal is right in law in setting aside the disallowance of Rs. 29,83,65,068/- being foreign exchange gain by holding that the gain made on account of restatement of external commercial borrowings is on capital account and liable to tax even when the assessee had failed to substantiate its claim by producing proof/evidences and details in support of such claim? 2. Whether in the facts and circumstances of the case, the Tribunal is right in law in holding that assessee is entitled for set off of brought forward Book Loss of Rs. 36,33,40,000/- in the computation of income under section 115JB of the Act by relying on decision in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) . 7. Shri Sanmathi argued that the assessee s business had commenced in the Financial Year 2008-09. The consolidated loss is claimed in the relevant Assessment Year 2010-11 and the same is not permissible. The CBDT circular refers to the relevant year and not the previous year. Therefore, the finding recorded by the ITAT is not sustainable and the authority in Amline Textiles (P) Ltd. vs. Income Tax Officer (2009) 27 SOT 0152 is not applicable to the facts of the case. 8. In reply, Shri Suryanarayana submitted that clause 2(iii) Explanation 1( i ) of Section 115JB of the Act is unambiguous and includes the brought forward or unabsorbed depreciation whichever is less as per the books of accounts to be set off. 9. We have car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess as per the books of accounts must be permitted to be set off. The CIT(A) Commissioner of Income Tax (Appeals) and the ITAT Income Tax Appellate Tribunal placing reliance on CBDT Central Board of Direct Taxes Circular No.495 dated September 22, 1987, have rightly held that the cumulative brought forward losses or unabsorbed depreciation should be considered for set off. In view of unambiguous language employed in the statute, no exception can be taken with ITAT s order confirming the CIT(A) s order holding that the assessee is entitled to claim set off. So far as the actual amount is concerned, the ITAT has remitted the matter to the Assessing Officer. However, on principle, the ITAT has rightly held that the assessee is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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