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Income Tax Appellate Tribunal, MUMBAI BENCHES “D” MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2011-12. The appeal is directed against the order of the Commissioner (Appeals) – 10, Mumbai and arises out of order u/s 143(3) of the Income Tax Act 1961, (The ‘Act’).
The sole ground raised
by the assessee in this appeal is that the learned CIT(A) erred in holding that reinstatement of valuation of outstanding export bills to the extent of Rs. 2,00,421/- is only a provision for loss and actual amount of loss will be known only when outstanding bills are realised and accordingly the same is disallowable. Thus it is submitted that the Assessing Officer (AO) be directed to reduce the assessed income by Rs. 2,00,421/-.
3. Briefly stated the facts are that the assessee had debited Rs. 2,00,421/- on account of foreign exchange fluctuation loss. Since in earlier year, the same addition was made, the AO followed the rule consistency and disallowed Rs. 2,00,421/-.
The assessee preferred an appeal before the learned CIT(A) against the above order of the AO. We find that the learned CIT(A) has followed his order for the A.Y. 2010-11 and directed the AO that after providing proper opportunity of being heard to the assessee, he should allow only realised losses and disallow the marked to market losses claimed by the assessee.
Before us, the learned counsel of the assessee relied on the order of the Tribunal in the case of the assessee for the A.Y. 2010-11 (ITA No. 3078/M/2014). The learned DR on the other hand relied on the order of the learned CIT(A).
We have heard the rival submissions and perused the relevant material on record. We find that a similar issue arose before the Co- ordinate Bench in the case of the assessee for the A.Y. 2010-11. The Tribunal followed the judgement of the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254 and held as under: ‘’We therefore, held that the said amount may be allowed as deduction u/s 37(1) of the Income Tax Act. The assessee has been consistently following the similar accounting pattern in the previous years. There has been consideration whether the assessee as showing gain due to exchange fluctuations on the pending bills which has been claimed as income in the respective assessment years. The revenue cannot held of quality at the same time on one berth the revenue has been existing the gains due to the foreign exchange fluctuations and on the other side which disallow the loss due to the foreign exchange fluctuations.’’ As the facts are similar, we follow the order of the Co- 6.1 ordinate Bench and direct the AO to reduce the assessed income by Rs. 2,00,421/-.