CLASSIC CITI INVESTMENT PVT.LTD,,PUNE vs. PR. COMMISSIONER OF INCOME TAX -1,, PUNE
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE
Before: SHRI R.S. SYAL & SHRI S.S.VISWANETHRA RAVI
आदेश / ORDER
PER R.S. SYAL, VP :
This appeal by the assessee is directed against the order
dt. 27-03-2017 passed by the Pr.CIT-1, Pune u/s.263 of the
Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation
to the assessment year 2012-13.
It is a recalled matter inasmuch as the earlier ex parte order
passed by the Tribunal on 11-09-2020 was subsequently recalled
vide its later order dated 10-07-2023 in M.A.No.32/PUN/2023.
Briefly stated, the facts of the case are that the assessee filed
its return declaring certain amount of loss. In the assessment
2 ITA No.1317/PUN/2017 Classic Citi Investment Pvt. Ltd.
completed u/s.143(3), the income was again determined at a loss but
with a different figure. The ld. Pr.CIT, on perusal of records,
observed that the assessee had borrowed funds for construction of
its hotel building and acquiring other fixed assets. The assessee
claimed deduction towards foreign exchange loss amounting to
Rs.6,23,43,841/- in the Profit and loss account. Since the amount
was borrowed in foreign currency for acquisition of certain capital
assets, the ld. Pr.CIT opined that Assessing Officer (AO) wrongly
granted deduction in respect of such foreign exchange loss. He,
therefore, held the assessment order to be erroneous and prejudicial
to the interest of the Revenue and directed the AO to examine the
eligibility of deduction claim on account of foreign exchange loss of
Rs.6.23 crore. Aggrieved thereby, the assessee has come up in
appeal before the Tribunal.
Having heard the rival submissions and gone through the
relevant material on record, it is seen that the assessee is engaged in
the business of running hotels at Pune and Nagpur. Certain amount
of loan was taken in foreign currency for capital purposes. Loss on
foreign exchange fluctuation in respect of such loan amounting to
Rs.6.23 crore was claimed as deduction. The same could not have
been allowed as deduction in terms of the judgment of Hon’ble
Supreme Court in CIT Vs. Woodward Governor India Pvt.
3 ITA No.1317/PUN/2017 Classic Citi Investment Pvt. Ltd.
Ltd.(2009) 312 ITR 254 (SC). The AO, without conducting any
enquiry on this issue, finalized the assessment u/s.143(3) and
eventually allowed the deduction. In view of the fact that such
foreign exchange fluctuation loss is not deductible as it pertains to
loans taken for capital purposes, the AO by allowing deduction for
this sum, passed an erroneous order which was prejudicial to the
interest of the Revenue. In our considered opinion, no exception
can be taken to the view canvassed by the ld. Pr.CIT in this regard.
We, therefore, upold the same.
In the result, the appeal is dismissed. Order pronounced in the Open Court on 22nd August, 2023.
Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 22nd August, 2023 सतीश आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The respondent 2. The Pr.CIT concerned 3. 4. DR, ITAT, ‘B’ Bench, Pune गाड� फाईल / Guard file. 5. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
4 ITA No.1317/PUN/2017 Classic Citi Investment Pvt. Ltd.
Date 1. Draft dictated on 16-08-2023 Sr.PS 2. Draft placed before author 16-08-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *
