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TMI Blog2022 (9) TMI 1652X X X X Extracts X X X X X X X X Extracts X X X X ..... e viz-a-viz the rate at which loans was available, the transactional gain or loss is to be assessed as Revenue. Respectfully following in the case of Wipro Finance Ltd [ 2022 (4) TMI 694 - SUPREME COURT ] we allow the claim of assessee. Disallowance of expenses relatable to exempt income by invoking the provisions of section 14A r.w.rule 8D - HELD THAT:-Assessee did not make any submission qua which limb of Rule 8D, disallowance is made, he could not brought out any submissions. Hence, we dismiss this ground of assessee. Appeal filed by the assessee is partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred in foreign currency exchange fluctuation on account of ECB loss holding the same as capital in nature. For this, assessee has raised following grounds:- 2. The Commissioner of Income tax (Appeals) erred in confirming the disallowance of Rs.37,08,705/- being loss incurred in foreign currency exchange fluctuation on account ECB loss on the ground that it is capital in nature. 2.1 The Commissioner of Income tax (Appeals) ought to have appreciated that the borrowings were for the purpose of business and hence cost relating thereof is an allowable deduction. 2.2 The Commissioner of Income tax (Appeals) ought to have appreciated that only in respect of transactions to which Section 43A applies, foreign exchange loss or gains shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rential or transactional difference has resulted in loss of Rs.37,08,705/- to the assessee. The ld.counsel explained that the AO as well as the CIT(A) has considered the application of provision of section 43A of the Act and disallowed the loss. The ld.counsel argued that section 43A of the Act has been inserted to provide that if an assessee incurs such a loss on account of an imported asset, then such exchange loss has to be adjusted with the cost of the respective asset and should not be considered as a revenue item. He argued that when there is a specific section for treatment of such loss for an imported asset, there is no such section for such loss incurred on account of domestic assets. There is no such section for such loss on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.866/PN/2014 and Chennai Bench in the case of TVS Motor Co. Ltd., in ITA No.1153/Mds/2016 & 1183/Mds./2016. 6. When these were pointed out to ld. Senior DR, he only relied on the assessment order and that of the CIT(A). 7. We have heard rival contentions and gone through facts and circumstances of the case. Admitted facts are that the assessee has availed an external commercial borrowing to part finance its expansion project. The loan was drawn down and utilized for the purpose of fixed assets all of which were purchased from domestic market i.e., domestic assets. The assessee did not use the loan for purchase of assets from abroad. Accordingly, fluctuation in the exchange rate viz-a-viz the rate at which loans was available, the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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