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TMI Blog2008 (10) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... the gain of Rs. 1,08,13,049 towards unpaid bills on account of fluctuation in the foreign exchange rate. - The assessee had set off the gain as against the loss in the transaction and disclosed the loss at the rate of Rs. 69,25,345 in one transaction and Rs.29,44,681 in respect of other transaction. - The Assessing Officer accepted the return of the assessee. The Commissioner of Income-tax in a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the court was delivered by K. SREEDHAR RAO J.— The respondent (assessee) filed return for the assessment year 1996-97. The assessee had imported the materials from abroad. There was one transaction towards import of materials for which the assessee had shown the loss of Rs. 1,37,57,730 in respect of unpaid bills on account of fluctuation in the foreign exchange rate (FER). In respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to deduction towards loss on account of fluctuation in FER. The Appellate Tribunal on appeal set aside the order of the Commissioner of Income-tax confirming the order of the Assessing Officer. The State is in appeal. 3. The following substantial questions of law are formulated for consideration: "(i) Whether the Tribunal was correct in holding that a sum of Rs. 69,25,345 has to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asses and before the payments were made hypothetical fluctuation was considered as on the last date of the accounting year without there being any actual loss ? (iv) Whether the Tribunal was correct in holding that a sum of Rs. 8,87,675 incurred by the assessee for maintenance of house on account of payment of rent of Rs. 4,56,000 claim of depreciation of Rs. 37,465 and maintenance of Rs. 3,94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and gain on account of foreign exchange rate fluctuation as on March 31, 1996, which is perfectly is in accordance with law. 5. The assessee had sought for deduction of maintenance of guest house expenditure. The income-tax law did not permit deduction towards the maintenance of guest house expenditure for the assessment year in question. In that view, the contra finding of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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