Khandelwal Brothers Pvt. Ltd. vs. CIT 117 ITR 452 (Cal); CIT v. Oil India Ltd.

154 ITR 460High Court1985#8211 most cited

What is Khandelwal Brothers Pvt. Ltd. vs. CIT 117 ITR 452 (Cal); CIT v. Oil India Ltd. authority for?

Where the mercantile system of accounting is followed, foreign exchange fluctuation losses on circulating capital or revenue accounts are treated as revenue expenditure in the year of devaluation.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2007 to 2023.

Also referred to as

Khandelwal Brothers Pvt. Ltd. v. CIT · foreign exchange fluctuation loss · revenue expenditure · mercantile accounting · devaluation · circulating capital · revenue account · 117 ITR 452 · 154 ITR 460

Judgments citing Khandelwal Brothers Pvt. Ltd. vs. CIT 117 ITR 452 (Cal); CIT v. Oil India Ltd.

Concentrix Services India Private Limited (Formerly Known As Minacs Private Limited, Minacs Limited & Adity Birla Minacs Worldwide Limited ), Mumbai vs. Joint Commissioner of It (OSD)10(2)(2)Assistant Commissioner of Income Tax-9(2)(2), Mumbai

ITA 5764/MUM/2017[2012-13]Status: DisposedITAT Mumbai18 Oct 2023AY 2012-13
For Appellant: Shri Yogesh TharFor Respondent: Shri Ajit Pal Singh Daia
Section 143(3)Section 144C(3)Section 92(1)Section 92B

…foreign exchange fluctuation loss suffered on account of circulating capital or revenue account should be treated as revenue expenditure in the year in which the devaluation takes place when the method of accounting followed is mercantile. • 116 ITR 1 (SC) • 154 ITR 460 (Cal) • 90 ITR 323 (Ker) • 97 ITD 125 (Ahd) (TM) @ 151 para 8.28 Accordingly, this itself establishes that the Appellant has adopted the system of accounting which is fair and reasonable and supported by the Accounting Standard AS -11, Rule 115 and various authorities and not adopted to avoid incidence of income tax. And in any case, as submitt…

Concentrix Services India Private Limited (Formerly Known As Minacs Private Limited, Minacs Limited & Adity Birla Minacs Worldwide Limited ), Mumbai vs. Deputy Commissioner of Income Tax-10(2)(2), Mumbai

ITA 5260/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Oct 2023AY 2011-12
For Appellant: Shri Yogesh TharFor Respondent: Shri Ajit Pal Singh Daia
Section 143(3)Section 144C(3)Section 92(1)Section 92B

…foreign exchange fluctuation loss suffered on account of circulating capital or revenue account should be treated as revenue expenditure in the year in which the devaluation takes place when the method of accounting followed is mercantile. • 116 ITR 1 (SC) • 154 ITR 460 (Cal) • 90 ITR 323 (Ker) • 97 ITD 125 (Ahd) (TM) @ 151 para 8.28 Accordingly, this itself establishes that the Appellant has adopted the system of accounting which is fair and reasonable and supported by the Accounting Standard AS -11, Rule 115 and various authorities and not adopted to avoid incidence of income tax. And in any case, as submitt…

The ACIT, Circle-2(1)(2), Ahmedabad vs. Mundra International Container Terminal Pvt. Ltd., Kutch

In the result, the appeal of the revenue is dismissed

ITA 2171/AHD/2017[2013-14]Status: DisposedITAT Ahmedabad28 Jun 2019AY 2013-14
For Appellant: Shri S.N. Soparkar, A.RFor Respondent: Shri Alok Singh, CIT-D.R
Section 143(2)Section 14ASection 32

…foreign exchange fluctuation loss suffered on account of circulating capital or revenue account should be treated as revenue expenditure in the year in which the devaluation takes place when the method of accounting followed is mercantile. • 116 ITR 1 (SC) • 154 ITR 460 (Cal) • 90 ITR 323 (Ker) • 97ITD 125(Ahd) (TM) 151 para 8.28 Accordingly, this itself establishes that the Appellant has adopted the system of accounting which is fair and reasonable and supported by the Accounting Standard AS - 11, Rule 115 and various authorities and not adopted to avoid incidence of income tax. And in any case, as submitted by…

The ACIT, Circle-2(1)(2), Ahmedabad vs. M/S. Mundra International Container Terminal Pvt. Ltd., Kutch

In the result, the appeal of the revenue is dismissed

ITA 1117/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad28 Jun 2019AY 2012-13
For Appellant: Shri S.N. Soparkar, A.RFor Respondent: Shri Alok Singh, CIT-D.R
Section 143(2)Section 14ASection 32

…foreign exchange fluctuation loss suffered on account of circulating capital or revenue account should be treated as revenue expenditure in the year in which the devaluation takes place when the method of accounting followed is mercantile. • 116 ITR 1 (SC) • 154 ITR 460 (Cal) • 90 ITR 323 (Ker) • 97ITD 125(Ahd) (TM) 151 para 8.28 Accordingly, this itself establishes that the Appellant has adopted the system of accounting which is fair and reasonable and supported by the Accounting Standard AS - 11, Rule 115 and various authorities and not adopted to avoid incidence of income tax. And in any case, as submitted by…

Industrial Filters & Fabrics Private Limited, Indore vs. The ACIT 5(1), Indore

The appeal of the assessee is dismissed

ITA 104/IND/2013[2009-10]Status: DisposedITAT Indore19 Sept 2018AY 2009-10

Bench: Shri Kul Bharat & Shri Manish Borada.Y. 2009-10

Section 14ASection 43A

…it is very clear that the loss on the foreign exchange difference on the balance sheet date is expenditure u/s 37. 2.6 Appellant rely on the following cases : A.CIT Vs Woodward Governor India P.Ltd. 312 ITR 254 (SC) B.CIT Vs. Martin & Harris P. Ltd. (1985) 154 ITR 460(Cal) C. Oil & natural Gas Corp. Ltd. Vs CIT (2010) 15 ITJ 297 (SC) D. Dy. CIT v. Cosmo Films Ltd. (2012) 13 ITR 340 (Delhi)(Trib.) : In this case, assessee converted the foreign currency assets and liabilities into rupee terms at the prevailing exchange rate at the last date of financial 9 Industrial Filters and Fabrics year and this was refle…

DCIT, Cir-2(1), Kolkata vs. M/S Cae India Pvt. Ltd., Bangalore

In the result, appeal of Revenue stands dismissed

ITA 379/KOL/2015[2009-2010]Status: DisposedITAT Kolkata06 Dec 2017AY 2009-2010

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Raviassessment Year:2009-10

Section 143(3)

…This instruction would be applicable only in situations where the loss has incurred on the basis of Speculative transactions which is not the case here. In addition, considering the decision of the jurisdictional High Court in CIT vs. Martin & Harris (P) Ltd. 154 ITR 460 as well as that of Supreme Court in CIT Vs. Woodward Governor India (P) Ltd 312 ITR 254,the trading liability would vary at the end of the financial year due to exchange rate fluctuations at the end of the accounting year i.e.as on 31st March of the financial year has to be accounted for. In the Appellant’s case, it is seen that the exchange rate…

Madhu Jayanti International Limited, Kolkata vs. DCIT, Circle - 4(1), Kolkata

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

ITA 214/KOL/2016[2011-2012]Status: DisposedITAT Kolkata01 Dec 2017AY 2011-2012

Bench: Hon’Ble Shri Aby. T. Varkey, Jm & Shri M.Balaganesh, Am ] I.T.A No. 214/Kol/2016 Assessment Year : 2011-12 Madhu Jayanti International Ltd. -Vs- Dcit, Cc-4(1), Kolkata [Pan: Aabcm 7502 R] (Appellant) (Respondent)

For Appellant: Shri Akash Mansinka, ARFor Respondent: Shri G. Mallikarjune, CIT DR
Section 139(5)Section 143(3)Section 144C(5)Section 92CSection 92D

…id to be a contingent liability or an anticipated future loss. [Reference can also be made to the decisions in the case of Khandelwal Brothers Pvt. Ltd. vs. CIT 117 ITR 452 (Cal); CIT vs. Oil India Ltd. 143 ITR 848 (Cal); and CIT vs. Martin and Harris P. Ltd. 154 ITR 460 (Cal)] • The Delhi ITA T in the case of Oil and Natural Gas Corporation Ltd vs. DCIT [2003] 261 ITR 1 (Delhi ITAT - SB) held as follows: " ... the assessee's claim for loss arising as a result of fluctuation in foreign exchange rates on the closing day of the year has been disallowed by the Assessing Officer inter alia, on the ground that this l…

ITO 10(2)(2), Mumbai vs. Lionbridge Technologies P.Ltd, Navi Mumbai

In the result, the appeals of the assessee in ITA No

ITA 290/MUM/2015[2010-11]Status: DisposedITAT Mumbai18 Nov 2015AY 2010-11

Bench: Sh. A.D. Jainand Sh. N.K. Billaiya

For Appellant: S/Sh. Ajay Vohra. Sr.Advocate & N.K. Jain, AdvocateFor Respondent: S/Sh. N.K.Chand, CIT(DR) & Jitendra Yadav

…TTJ 347 (Del.) 13. “Deutsche Bank A.G. vs. DCIT”, 86 ITD 431 14. “Bestobell (India) Ltd”, 117 ITR 789 (Cal.) 15. “Khandelwal Brothers Pvt. Ltd. v. CIT”, 117 ITR 452 (Cal. 16. “CIT vs. Oil India Ltd.” 143 ITR 848 (Cal.) 17. “CIT vs. Martin and Harris P. Ltd.” 154 ITR 460 (Cal.) 18. “Oil and Natural Gas Corpn. Ltd. vs. DCIT”, (2003) 261 ITR 1 (SB) (Delhi ITAT) 19. “DCIT VS. Sony India Pvt. Ltd.”. 114 ITD 446 [ affirmed up to the Hon’ble Supreme Court, as reported at 312 ITR 254 (SC)] 20. “Sumit Diamond India P. Ltd. vs. ACIT”, ITA No.7148/Mum/2012). 21. “M/s. Techbooks International Pvt. Ltd. v. ACIT”, ITA No.722/…

Lionbridge Technologies P.Ltd, Navi Mumbai vs. ITO 8(2)(2), Mumbai

In the result, the appeals of the assessee in ITA No

ITA 7415/MUM/2014[2010-11]Status: DisposedITAT Mumbai18 Nov 2015AY 2010-11

Bench: Sh. A.D. Jainand Sh. N.K. Billaiya

For Appellant: S/Sh. Ajay Vohra. Sr.Advocate & N.K. Jain, AdvocateFor Respondent: S/Sh. N.K.Chand, CIT(DR) & Jitendra Yadav

…TTJ 347 (Del.) 13. “Deutsche Bank A.G. vs. DCIT”, 86 ITD 431 14. “Bestobell (India) Ltd”, 117 ITR 789 (Cal.) 15. “Khandelwal Brothers Pvt. Ltd. v. CIT”, 117 ITR 452 (Cal. 16. “CIT vs. Oil India Ltd.” 143 ITR 848 (Cal.) 17. “CIT vs. Martin and Harris P. Ltd.” 154 ITR 460 (Cal.) 18. “Oil and Natural Gas Corpn. Ltd. vs. DCIT”, (2003) 261 ITR 1 (SB) (Delhi ITAT) 19. “DCIT VS. Sony India Pvt. Ltd.”. 114 ITD 446 [ affirmed up to the Hon’ble Supreme Court, as reported at 312 ITR 254 (SC)] 20. “Sumit Diamond India P. Ltd. vs. ACIT”, ITA No.7148/Mum/2012). 21. “M/s. Techbooks International Pvt. Ltd. v. ACIT”, ITA No.722/…

Lionbridge Technologies P. Ltd, Navi Mumbai vs. ITO RG 8(2)(2), Mumbai

In the result, the appeals of the assessee in ITA No

ITA 668/MUM/2014[2009-10]Status: DisposedITAT Mumbai18 Nov 2015AY 2009-10

Bench: Sh. A.D. Jainand Sh. N.K. Billaiya

For Appellant: S/Sh. Ajay Vohra. Sr.Advocate & N.K. Jain, AdvocateFor Respondent: S/Sh. N.K.Chand, CIT(DR) & Jitendra Yadav

…TTJ 347 (Del.) 13. “Deutsche Bank A.G. vs. DCIT”, 86 ITD 431 14. “Bestobell (India) Ltd”, 117 ITR 789 (Cal.) 15. “Khandelwal Brothers Pvt. Ltd. v. CIT”, 117 ITR 452 (Cal. 16. “CIT vs. Oil India Ltd.” 143 ITR 848 (Cal.) 17. “CIT vs. Martin and Harris P. Ltd.” 154 ITR 460 (Cal.) 18. “Oil and Natural Gas Corpn. Ltd. vs. DCIT”, (2003) 261 ITR 1 (SB) (Delhi ITAT) 19. “DCIT VS. Sony India Pvt. Ltd.”. 114 ITD 446 [ affirmed up to the Hon’ble Supreme Court, as reported at 312 ITR 254 (SC)] 20. “Sumit Diamond India P. Ltd. vs. ACIT”, ITA No.7148/Mum/2012). 21. “M/s. Techbooks International Pvt. Ltd. v. ACIT”, ITA No.722/…

ITO 8(2)(2), Mumbai vs. Lionbridge Technologies P.Ltd, Navi Mumbai

In the result, the appeals of the assessee in ITA No

ITA 1375/MUM/2014[2009-10]Status: DisposedITAT Mumbai18 Nov 2015AY 2009-10

Bench: Sh. A.D. Jainand Sh. N.K. Billaiya

For Appellant: S/Sh. Ajay Vohra. Sr.Advocate & N.K. Jain, AdvocateFor Respondent: S/Sh. N.K.Chand, CIT(DR) & Jitendra Yadav

…TTJ 347 (Del.) 13. “Deutsche Bank A.G. vs. DCIT”, 86 ITD 431 14. “Bestobell (India) Ltd”, 117 ITR 789 (Cal.) 15. “Khandelwal Brothers Pvt. Ltd. v. CIT”, 117 ITR 452 (Cal. 16. “CIT vs. Oil India Ltd.” 143 ITR 848 (Cal.) 17. “CIT vs. Martin and Harris P. Ltd.” 154 ITR 460 (Cal.) 18. “Oil and Natural Gas Corpn. Ltd. vs. DCIT”, (2003) 261 ITR 1 (SB) (Delhi ITAT) 19. “DCIT VS. Sony India Pvt. Ltd.”. 114 ITD 446 [ affirmed up to the Hon’ble Supreme Court, as reported at 312 ITR 254 (SC)] 20. “Sumit Diamond India P. Ltd. vs. ACIT”, ITA No.7148/Mum/2012). 21. “M/s. Techbooks International Pvt. Ltd. v. ACIT”, ITA No.722/…

Commissioner of Income Tax vs. Woodward Governor India Pvt. Ltd

The appeal is dismissed

ITA-49/2005HC Delhi30 Apr 2007

…this line of reasoning includes Khandelwal Brothers (P) Ltd. – vs- CIT, 117 ITR 452(Cal.), Oil India Co. Ltd. –vs- CIT, 137 ITR 156(Cal.), CIT –vs- International Combustion(I)(P) Ltd., 137 ITR 184(Cal.), CIT –vs- Martin and Hariss(P) Ltd., 154 ITR 460(Cal.), CIT – vs- E.W. Stevens Co. Ltd., 158 ITR 235(Cal.) and CIT –vs- IBM Trade Corporation, 161 ITR 673(Bom.). These decisions, with which we respectfully concur, make it clear that the question whether the assessee can claim deduction of the increased liability in the revenue account as a result of fluctuation in the rate of f…

Commissioner of Income Tax vs. India Pvt. Ltd

The appeal is dismissed

ITA/49/2005HC Delhi30 Apr 2007

…this line of reasoning includes Khandelwal Brothers (P) Ltd. – vs- CIT, 117 ITR 452(Cal.), Oil India Co. Ltd. –vs- CIT, 137 ITR 156(Cal.), CIT –vs- International Combustion(I)(P) Ltd., 137 ITR 184(Cal.), CIT –vs- Martin and Hariss(P) Ltd., 154 ITR 460(Cal.), CIT – vs- E.W. Stevens Co. Ltd., 158 ITR 235(Cal.) and CIT –vs- IBM Trade Corporation, 161 ITR 673(Bom.). These decisions, with which we respectfully concur, make it clear that the question whether the assessee can claim deduction of the increased liability in the revenue account as a result of fluctuation in the rate of f…

Khandelwal Brothers Pvt. Ltd. vs. CIT 117 ITR 452 (Cal); CIT v. Oil India Ltd. (154 ITR 460) — Cited in 13 Judgments | BharatTax