CIT v. Maruti Udyog

320 ITR 729Supreme Court of India2010#9675 most cited

What is CIT v. Maruti Udyog authority for?

Unrealized losses due to foreign exchange fluctuation on loans taken for revenue purposes are allowable as a deduction. The Supreme Court's decisions in CIT v. Maruti Udyog Ltd. and others did not address the allowability of hedging transaction losses.

11

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2015 to 2022.

Also referred to as

CIT v. Maruti Udyog · foreign exchange fluctuation · unrealized loss · revenue purpose · deduction · hedging transaction · accounting year · supreme court

Read the full judgment

Judgments citing CIT v. Maruti Udyog

M/S Bosch Limited, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 1629/BANG/2018[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Bosch Limited, Vs. The Assistant Commissioner Hosur Road, Adugodi, Of Income Tax, Ltu, Bangalore – 560 030. Circle 1, Pan: Aaacm 9840P Bangalore. Appellant Respondent Appellant By : Shri Percy Pardiwala, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 01.09.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.2. This Appeal Is Against The Order Of The Cit(Appeals), Bangalore-9, Bangalore Dated 31.3.2018 For The Assessment Year 2013- 14. 3. The Assessee Raised Grounds Pertaining To The Following Issues:- Deduction U/S. 35(2Ab) Computed On Net Expenditure As Opposed To Gross Expenditure Disallowance Of Provision For Bad & Doubtful Debts I) Disallowance Of Provision For Long Term Service Award Disallowance Of Expenditure U/S. 14A Of The Act Ii) Page 2 Of 67

For Appellant: Shri Percy Pardiwala, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru
Section 14ASection 35Section 37Section 43BSection 80J

…dings. 98. Thus, I find that the AO has followed the judgement of Hon'ble Supreme Court in CIT v Woodward Governor India P. Ltd 120091 312 ITR 254 )reiterated in Oil and Natural Gas Corporation Ltd. v. CIT 12010( 322 ITR 180and CIT v. Maruti Udyog Ltd. 120101 320 ITR 729) in letter and spirit. The unrealized loss due to foreign exchange fluctuation on the last date of the accounting year in respect of loans taken for revenue purposes has been allowed as deduction to the appellant. 99. However, the appellant wants that the restatement of this hedging transaction should be allowed as revenue expenditure. This claim…

Joint Commissioner of Income Tax Ltu (OSD) Circle-1, Bangalore vs. M/S Toyota Kirloskar Motors Pvt Ltd, Bangalore

In the result, the appeal filed by the Revenue and assessee are partly allowed for statistical purposes

ITA 2016/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 Aug 2021AY 2013-14

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Sri.P.C.Kincha, CAFor Respondent: Sri.Muzaffar Hussaain, CIT-DR
Section 192

…AO. 89. Thus, I find that the AO has followed the judgment of Hon’ble Supreme Court in CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 254 reiterated in Oil and Natural Gas Corporation Limited v. CIT [2010] 322 ITR 180 and CIT v. Maruti Udyog Ltd [2010] 320 ITR 729 in letter and spirit. The unrealized loss due to foreign exchange fluctuation on the last date of the accounting year in respect of loans taken for revenue purposes has been allowed as deduction by AO to the assessee. 90. However, the assessee wants that the restatement of this hedging transaction should be allowed as revenue expenditure. This cl…

M/S. Toyota Kirloskar Motor Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Circle-1, Ltu, Bangalore

In the result, the appeal filed by the Revenue and assessee are partly allowed for statistical purposes

ITA 1972/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 Aug 2021AY 2013-14

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Sri.P.C.Kincha, CAFor Respondent: Sri.Muzaffar Hussaain, CIT-DR
Section 192

…AO. 89. Thus, I find that the AO has followed the judgment of Hon’ble Supreme Court in CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 254 reiterated in Oil and Natural Gas Corporation Limited v. CIT [2010] 322 ITR 180 and CIT v. Maruti Udyog Ltd [2010] 320 ITR 729 in letter and spirit. The unrealized loss due to foreign exchange fluctuation on the last date of the accounting year in respect of loans taken for revenue purposes has been allowed as deduction by AO to the assessee. 90. However, the assessee wants that the restatement of this hedging transaction should be allowed as revenue expenditure. This cl…

M/S. Kei Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result, Ground No.3

ITA 528/DEL/2016[2012-13]Status: DisposedITAT Delhi03 Dec 2020AY 2012-13

Bench: Shri Bhavnesh Saini, J.M. & Shri Anil Chaturvedi, A.M.

For Appellant: Shri Satyan Sethi, AdvocateFor Respondent: Ms. Parul Singh, Sr. D.R

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “C” : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. & SHRI ANIL CHATURVEDI, A.M. ITA.No.1433/Del./2014 - Assessment Year 2009-2010 The ACIT, Circle-5(1), M/s. K.E.I. Industries Room No.317-B, Limited, D-90, Okhla C.R. Building, vs Industrial Area, Phase-I, New New Delhi-2. Delhi. PAN AAACK0251C (Appellant) (Respondent) C.O.No.200/Del./2017 Arising out of ITA.No.1433/Del./2014 - Assessment Year 2009-2010 M/s. K.E.I. Industries The ACIT, Circle-5(1), Limited, D-90, Okhla Room No.317-B, Industrial Area, Phase-I, vs C.R. Building, New Delhi. New Delhi-2. PAN AAACK0251C (Cro…

ACIT, New Delhi vs. M/S. K.E.I. Industries Ltd., New Delhi

In the result, Ground No.3

ITA 1433/DEL/2014[2009-10]Status: DisposedITAT Delhi03 Dec 2020AY 2009-10

Bench: Shri Bhavnesh Saini, J.M. & Shri Anil Chaturvedi, A.M.

For Appellant: Shri Satyan Sethi, AdvocateFor Respondent: Ms. Parul Singh, Sr. D.R

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “C” : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. & SHRI ANIL CHATURVEDI, A.M. ITA.No.1433/Del./2014 - Assessment Year 2009-2010 The ACIT, Circle-5(1), M/s. K.E.I. Industries Room No.317-B, Limited, D-90, Okhla C.R. Building, vs Industrial Area, Phase-I, New New Delhi-2. Delhi. PAN AAACK0251C (Appellant) (Respondent) C.O.No.200/Del./2017 Arising out of ITA.No.1433/Del./2014 - Assessment Year 2009-2010 M/s. K.E.I. Industries The ACIT, Circle-5(1), Limited, D-90, Okhla Room No.317-B, Industrial Area, Phase-I, vs C.R. Building, New Delhi. New Delhi-2. PAN AAACK0251C (Cro…

Mainetti India Pvt Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the assessee allowed for statistical purposes

ITA 624/CHNY/2014[2009-10]Status: DisposedITAT Chennai15 Mar 2017AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singhआयकर अपील सं./Ita No.624/Mds/2014 "नधा"रण वष" /Assessment Year: 2009-10

Section 143(3)Section 144CSection 144C(13)Section 234BSection 37Section 43ASection 92C(2)

…fluctuation on re-statement of ECB loan to be added to the cost of fixed assets and allow the depreciation on the assets. The assessee relied on the following decisions: (i) CIT v Woodward Governor of India(P) Ltd.312 ITR 254(SC) (ii) CIT v Maruti Udyog Ltd 320 ITR 729 (SC) 5.2 On the other hand, the Learned Departmental Representative (hereinafter referred to as ‘Ld.DR’) argued that the assesse has borrowed the funds for the purpose of capital assets and the expenditure accrued on re-statement of foreign exchange loss is a capital loss which is not allowable as Revenue expenditure. Ld.DR also argued that Se…

Reliance Lifestyle Holdings Ltd, Mumbai vs. DCIT RG 3(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purpose

ITA 6797/MUM/2014[2010-11]Status: DisposedITAT Mumbai13 Dec 2016AY 2010-11
Section 143(2)Section 143(3)Section 37(1)Section 43B

…of an amount, which is paid during the year. The issue of deduction on actual payment has been held to be proper in the case of CIT v. Vinay Cement Ltd. (2007) 213 CTR 268 (SC); CfT v. Alom Extrusion Ltd. (2010) 1 SCC 489(SC); CIT v. Maruti Udyog Ltd. (2010) 320 ITR 729 (SC), Berger Paints India Ltd. v. CIT (2004) ~66 ITR 99 (SC) and CIT v. Udaipur Distilleries Co. Ltd. (2009) 314 ITR 188 (SC). In view of the above, the disallowance of Rs. 36,40,709/ - made by the AO” 10. The ld. Counsel for the assessee vehemently argued before us that the ld. CIT(A) has grossly erred in confirming the order of AO on the issue…

DCIT, New Delhi vs. M/S. Sarvshaktiman Traders Pvt. Ltd., Delhi

ITA 2033/DEL/2013[2008-09]Status: DisposedITAT Delhi20 Jun 2016AY 2008-09

Bench: Shri I.C. Sudhir & Shri O.P. Kant Assessment Year: 2008-09 Deputy Cit, Vs. Sarvshaktiman Traders Pvt. Ltd., Circle-7(1), 17-Kucha Choudhary (Opp.Sbi), New Delhi. Chandni Chowk, Delhi. (Pan: Aaecs7085C) (Appellant) (Respondent) Assessee By: Shri Ved Jain, Adv. Department By : Shri Syed Nasir, Dr Date Of Hearing : 19.04.2016 Date Of Pronouncement: 20:06.2016 Order Per I.C. Sudhir:This Is An Appeal Filed By The Revenue Against The First Appellate Order Deleting The Addition Of Rs.17,63,24,155/- Made By The Assessing Officer On Account Of Foreign Exchange Loss.

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Syed Nasir, DR
Section 143(3)

…, mandates conversion of foreign exchange transaction on the closing day by applying the rate of exchange on the last date of the year. The learned AR further relied upon the following judgments in support of its contention:- i) CIT v. MarutiUdyog Ltd. [2010] 320 ITR 729 (SC) ii) Oil and Natural Gas Corporation Ltd. v. CIT [2010] 322 ITR 180 (SC) iii) DCIT v. Honeywell International (India) (P.) Ltd. [2009] 119 ITD 375 (Delhi) iv) ACIT v. Chettinad Cement Corporation Ltd. 140 TTJ 100 6 5. On going through the facts of the case we note that the issue is regarding loss on account of foreign exchange rate fluctuati…

Ambattur Clothing Ltd., Chennai vs. DCIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 910/CHNY/2015[2010-11]Status: DisposedITAT Chennai28 Dec 2015AY 2010-11

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. Nos.1436, 1643/Mds/2014, 910/Mds/2015 ("नधा"रण वष" / Assessment Year : 2008-09, 2009-10 & 2010-2011)

For Appellant: Shri. T. Banusekar, C.AFor Respondent: Shri. Rajib Kumar Hota, IRS, CIT
Section 10BSection 14ASection 14A(2)

…SC) reversing the decision of the Uttarakhand High Court in the same case reported in 301 ITR 415 (Uttarakhand), which had treated the exchange loss both relating to current and capital account as a contingent liability. Supreme Court in CIT v. Maruti Udyog, 320 ITR 729 (SC) decided that depreciation on cost enhanced by capitalization of foreign exchange loss was deductible following the decision in Woodward Governor India (supra). The Commissioner of Income Tax (Appeals) also noticed the relevance of the case law relied on by the assessee with regard to closure of forward contracts. The loss, as a result of c…

Ambattur Clothing Ltd., Chennai vs. DCIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 1643/CHNY/2014[2009-10]Status: DisposedITAT Chennai28 Dec 2015AY 2009-10

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. Nos.1436, 1643/Mds/2014, 910/Mds/2015 ("नधा"रण वष" / Assessment Year : 2008-09, 2009-10 & 2010-2011)

For Appellant: Shri. T. Banusekar, C.AFor Respondent: Shri. Rajib Kumar Hota, IRS, CIT
Section 10BSection 14ASection 14A(2)

…SC) reversing the decision of the Uttarakhand High Court in the same case reported in 301 ITR 415 (Uttarakhand), which had treated the exchange loss both relating to current and capital account as a contingent liability. Supreme Court in CIT v. Maruti Udyog, 320 ITR 729 (SC) decided that depreciation on cost enhanced by capitalization of foreign exchange loss was deductible following the decision in Woodward Governor India (supra). The Commissioner of Income Tax (Appeals) also noticed the relevance of the case law relied on by the assessee with regard to closure of forward contracts. The loss, as a result of c…

Ambattur Clothing Ltd., Chennai vs. DCIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 1436/CHNY/2014[2008-09]Status: DisposedITAT Chennai28 Dec 2015AY 2008-09

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. Nos.1436, 1643/Mds/2014, 910/Mds/2015 ("नधा"रण वष" / Assessment Year : 2008-09, 2009-10 & 2010-2011)

For Appellant: Shri. T. Banusekar, C.AFor Respondent: Shri. Rajib Kumar Hota, IRS, CIT
Section 10BSection 14ASection 14A(2)

…SC) reversing the decision of the Uttarakhand High Court in the same case reported in 301 ITR 415 (Uttarakhand), which had treated the exchange loss both relating to current and capital account as a contingent liability. Supreme Court in CIT v. Maruti Udyog, 320 ITR 729 (SC) decided that depreciation on cost enhanced by capitalization of foreign exchange loss was deductible following the decision in Woodward Governor India (supra). The Commissioner of Income Tax (Appeals) also noticed the relevance of the case law relied on by the assessee with regard to closure of forward contracts. The loss, as a result of c…

CIT v. Maruti Udyog (320 ITR 729) — Cited in 11 Judgments | BharatTax