DCIT (OSD)8(2), MUMBAI vs. PRIORITY JEWELS P.LTD, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal upheld the CIT(A)'s decision to delete the disallowance, following the Supreme Court's ruling in Woodward Governor India Pvt. Ltd. The unrealised foreign exchange loss was considered allowable.
What were the facts?
The assessee, engaged in diamond jewellery manufacturing, claimed a loss of ₹33,04,768 due to revaluation of foreign currency sundry debtors. The Assessing Officer disallowed this loss, deeming it notional.
What were the issues?
Whether unrealised foreign exchange loss on revaluation of foreign currency sundry debtors is a deductible business expense.
Which sections of the Income-tax Act were involved?
Not explicitly mentioned in the provided text
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Woodward Governor India Pvt. Ltd.968 citing312 ITR 254 · 2009 · SC · Read judgment
Income Tax Appellate Tribunal, “C” Bench, Mumbai
Before: Shri B.R. Baskaran (AM) & Shri Pawan Singh (JM)
The appeal filed by the Revenue is directed against the order dated 20.12.2013 passed by the learned CIT(A)-17, Mumbai and it relates to A.Y. 2010-11. The Revenue is aggrieved by the decision of the learned CIT(A) in deleting the disallowance of ` 33,04,768 claimed by the assessee as unrealised foreign exchange loss.
The assessee is engaged in the business of manufacture of diamonds studded jewellery and other related products. Sundry debtors account held in foreign currency was revalued by the assessee as on the balance sheet date and the same has resulted in loss ` 33,04,768/-. The Assessing Officer disallowed the loss holding that the same is notional in nature and the learned CIT(A) has deleted the loss by following decision rendered by Hon'ble Supreme Court in the case of Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254. The Revenue is aggrieved by the decision of the learned CIT(A).
2 M/s. Priority Jewels Pvt. Ltd.
Having heard the rival submissions, we are of the view that the order passed by the learned CIT(A) on the impugned issue does not call for any interference, since the learned CIT(A) has followed the decision rendered by Hon'ble Supreme Court in the case of Woodward Governor India Pvt. Ltd. (supra). Accordingly, we uphold the order passed by the learned CIT(A) on this issue.
In the result, appeal filed by the Revenue is dismissed
Order has been pronounced in the Court on 16.11.2016
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