DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT, SURAT vs. SAHAJANAND MEDICAL TECHNOLOGIES LIMITED, SURAT

ITA 366/SRT/2025Status: DisposedITAT Surat19 September 2025AY 2018-19Bench: MS. SUCHITRA R. KAMMBLE (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the addition on foreign exchange gain, finding it to be notional and capital in nature, not taxable. The Tribunal also upheld the deletion of USFDA expenses, considering them business expenditure. The revenue's appeal was dismissed.

What were the facts?

The revenue appealed against the CIT(A)'s deletion of additions related to foreign exchange gain on a capital loan and expenses for USFDA approval. The assessee had treated foreign exchange gain on a loan to its subsidiary as not taxable, while the AO considered it taxable under ICDS. The AO also disallowed USFDA approval expenses, claiming they were not genuine.

What were the issues?

Whether foreign exchange gain on a capital loan is taxable and whether expenses incurred for USFDA approval are allowable business expenditures. The validity of reassessment proceedings under Section 148A was also a key issue.

Which sections of the Income-tax Act were involved?

Section 145(2),Section 35(1)(iv),Section 148A(b),Section 148A(c),Section 148A(d)

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Before: MS. SUCHITRA R. KAMMBLE & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Rajesh C. Shah, CA
For Respondent: Shri Ravinder Sindhu, CIT-DR
Hearing: 28/08/2025Pronounced: 19/09/2025

PER BIJAYANANDA PRUSETH, AM: These two appeals by the revenue and cross objection by the assessee emanate from the orders passed under section 250 of the Income-tax Act, 1961 (in ITA No.364 & 366/SRT/2025/AY 2020-21 & 2018-19 & Co. No.11/SRT/2025/AY 2018-19 Sah

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