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TMI Blog2025 (2) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... & ESIC cannot be allowed as deduction, the assessee cannot expect the very same relief under another provision. When section 36(1)(va) of the Act mandates that such contribution has to be treated as 'income of the assessee'. Insofar as, the judicial precedents relied upon by the learned counsel of the assessee, on a careful perusal, we are of the view that in none of the decisions the alternate claim of deduction u/s. 37(1) of the Act has been accepted. Decided in favour of assessee. Taxability of unrealized foreign exchange fluctuation gain - HELD THAT:- Assessee has consistently followed a Revenue recognition method, under which the gain/loss arising on account of foreign exchange fluctuation has been treated as 'revenue in nature'. Therefore, wherever gain arose, the assessee offered it as 'income' and wherever there was loss, the assessee has claimed the loss. Following such revenue recognition principle, the assessee has offered the gain as 'income' in the impugned assessment year. Therefore, since the offer of gain as income is consistent with the accounting principle regularly followed by the assessee, claim of withdrawal of such income cannot be accepted. If assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment proceeding, while verifying the audit report, the Assessing Officer (AO) noticed that the assessee had claimed deduction on account of payment made towards employee's contribution to PF and ESIC. On further verification, he noticed that payment towards employees contribution to PF & ESIC was not made within the due date as provided u/s. 36(1)(va), of the Act. Thus, he treated such contribution made towards PF & ESIC as 'income of the assessee' in terms with section 2(24)(x) of the Act and added an amount of Rs. 1,66,084/- to the income of the assessee. Though, the assessee contested the aforesaid addition before learned first appellate authority, however, the addition was sustained. 4. Before us, learned counsel appearing for the assessee, though at the outset, conceded that the issue is no more res integra in view of the decision of Hon'ble Supreme Court in case of Checkmate Services Pvt Ltd Vs. CIT [2022] 143 taxmann.com 278 (SC), however, he submitted that the payment made by the assessee should be allowed as 'business expense' u/s. 37(1) of the Act. He submitted that allowability of claim u/s.37(1) of the Act has not been examined by the Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act mandates that such contribution has to be treated as 'income of the assessee'. Insofar as, the judicial precedents relied upon by the learned counsel of the assessee, on a careful perusal, we are of the view that in none of the decisions the alternate claim of deduction u/s. 37(1) of the Act has been accepted. Therefore, in our view, the decisions relied upon will be of no help to the assessee. Therefore, we decline to interfere with the decision taken by the departmental authorities. 7. In ground no. 2, the assessee has raised the issue of taxability of unrealized foreign exchange fluctuation gain amounting to Rs. 9,67,06,326/-. 8. Briefly, the facts are, during the year under consideration, the assessee earned an amount of Rs. 9,67,06,326/-, on account of revaluation of outstanding dues payable to its overseas sister concern due to fluctuation in the valuation of the foreign exchange. In the return of income filed for the assessment year under dispute, the assessee recognized such gain to be in the revenue side and offered it as 'income'. Accepting such income offered by the assessee, the A.O. completed the assessment. As could be seen, in A.Ys. 2009-10, 2014-15 and 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account also has to be treated to be on revenue account. The department has to take a consistent stand on this issue. With the afore-said observations, this ground is dismissed. 12.1 In the result, appeal is dismissed. ITA No. 6136/Mum/2024 A.Y. 2014-15 13. In ground no. 1, the assessee has challenged the disallowance of deduction claimed towards payment of employee's contribution to PF & ESIC, amounting to Rs. 2,78,27,748/- . This issue is identical to the issue raised in ground no. 1 of ITA No. 6135/Mum/2024, decided by us in the earlier part of the order. The decision taken therein would apply mutatis mutandis to this ground as well. Accordingly, ground is dismissed. 14. In ground nos. 2 to 8,the assessee has challenged the disallowance of additional claim of deduction, amounting to Rs. 41,26,12,905/-. 15. Briefly, the facts are, for the assessment year under dispute, the assessee filed its return of income on 28.11.2015, declaring income of Rs. 31,65,40,940/-. In course of assessment proceeding, the assessee, through submissions made on different dates, made additional claims of deduction, the details of which are as under: Sr. no. Nature of claims Amount Claimed v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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