Sutlej Cotton Mills Ltd. v. CIT

The Madras Silks India Pvt. Ltd., Tiruppur vs. DCIT, Tiruppur

In the result, the appeal filed by the assessee is allowed

Bench: Shri A. Mohan Alankamony & Shri Duvvuru Rl Reddyआयकर अपील सं./I T.A. No. 180/Mds/2017 "नधा"रण वष"/Assessment Year:2012-13 The Madras Silks India Pvt. Ltd., The Deputy Commissioner Of No. 68-A, College Road, Vs. Income Tax, Tirupur 641 602. Circle 1, Tirupur. [Pan: Aacct4954H] (Appellant) (Respondent) अपीलाथ" क" ओर से / Appellant By : Shri S. Swaminathan, C.A. ""यथ" क" ओर से/Respondent By : Shri Asish Tripathi, Jcit सुनवाई क" तार"ख/ Date Of Hearing : 30.08.2017 घोषणा क" तार"ख /Date Of Pronouncement : 31.10.2017 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 3, Coimbatore Dated 27.10.2016 Relevant To The Assessment Year 2012-13. The Only Effective Ground Raised In The Appeal Of The Assessee Is That The Ld. Cit(A) Has Erred In Confirming The Addition Of Foreign Exchange Fluctuation Loss On Principal Repayment Of Wind Mill Loan.

…f the Act. The Assessing Officer, while completing the assessment, has treated the foreign currency fluctuation loss on account of repayment as cost of the asset by following the decision of the Hon’ble Supreme Court in the case of Sutlej Mills P. Ltd. v. CIT 116 ITR 1 and in pursuant to the provisions of section 43A of the Act and allowed depreciation thereon, whereas, the gain was assessed as income because it has resulted consequent to demerger. 6.1 The foreign exchange fluctuation loss is in relation to foreign currency loan attributable to acquisition of indigenous machinery. Thus, the substance of the issu…

Rane Holdings Limited, Chennai vs. DCIT, Chennai

In the result, Revenue’s appeal in I

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamony

…f loan. Since the loan was borrowed for purchasing a capital asset, the foreign exchange loss incurred by the assessee is a capital loss. Therefore, according to the Ld. D.R., by placing reliance on the judgment of Apex Court in Sutlej Cotton Mills v. CIT (116 ITR 1), the Assessing Officer found that when the foreign currency was held as capital asset, such profit or loss can be on the capital nature. By applying 8 I.T.A. Nos.1089 & 1090/Mds/17 I.T.A. No.113/Mds/17 C.O. Nos.98 & 99/Mds/17 the above mentioned judgment of Apex Court in Sutlej Cotton Mills (supra), according to the Ld. D.R., the Assessing…

DCIT, Chennai vs. Rane Holdings Ltd., Chennai

In the result, Revenue’s appeal in I

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamony

…f loan. Since the loan was borrowed for purchasing a capital asset, the foreign exchange loss incurred by the assessee is a capital loss. Therefore, according to the Ld. D.R., by placing reliance on the judgment of Apex Court in Sutlej Cotton Mills v. CIT (116 ITR 1), the Assessing Officer found that when the foreign currency was held as capital asset, such profit or loss can be on the capital nature. By applying 8 I.T.A. Nos.1089 & 1090/Mds/17 I.T.A. No.113/Mds/17 C.O. Nos.98 & 99/Mds/17 the above mentioned judgment of Apex Court in Sutlej Cotton Mills (supra), according to the Ld. D.R., the Assessing…

DCIT, Chennai vs. Rane Holdings Ltd., Chennai

In the result, Revenue’s appeal in I

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamony

…f loan. Since the loan was borrowed for purchasing a capital asset, the foreign exchange loss incurred by the assessee is a capital loss. Therefore, according to the Ld. D.R., by placing reliance on the judgment of Apex Court in Sutlej Cotton Mills v. CIT (116 ITR 1), the Assessing Officer found that when the foreign currency was held as capital asset, such profit or loss can be on the capital nature. By applying 8 I.T.A. Nos.1089 & 1090/Mds/17 I.T.A. No.113/Mds/17 C.O. Nos.98 & 99/Mds/17 the above mentioned judgment of Apex Court in Sutlej Cotton Mills (supra), according to the Ld. D.R., the Assessing…

S.M.Noorudheen Shajahan, Coimbatore vs. JCIT, Coimbatore

In the result, the appeal filed by the assessee is dismissed

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddyआयकर अपील सं./I.T.A.No.256/Mds/2016 "नधा"रण वष"/Assessment Year:2011-12 Shri S.M. Noorudheen Shajahan, The Joint Commissioner Of No. 25A-4/1, Ami Mid Town, Vs. Income Tax, Range Iii, D.B. Road, R.S. Puram, Coimbatore 641 018. Coimbatore 641 002. [Pan:Abcpn6465F] (अपीलाथ" /Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से / Appellant By : Shri S. Sridhar, Advocate ""यथ" क" ओर से/Respondent By : Shri Ashish Tripathi, Jcit सुनवाई क" तार"ख/ Date Of Hearing : 26.07.2017 घोषणा क" तार"ख /Date Of Pronouncement : 13.10.2017 आदेश /O R D E R Per Bench: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 1, Coimbatore, Dated 16.11.2015 Relevant To The Assessment Year 2011-12, Wherein, The Only Effective Ground Raised In The Appeal Is That The Ld. Cit(A) Has Erred In Confirming The Addition Of ₹.43,90,810/- From Sale Of Lands Treating The Same As Business Income.

…he assessee in his books of account, showing it as a fixed asset therein and, consequently, returning it as a part of his wealth (of which there is though no evidence) would, therefore, be of little consequence (ref: Sutlej Cotton Mills Limited vs. CIT [1979] 116 ITR 1 (SC)). 6.3 The assessee’s claim for exemption under section 54F of the Act stands, under the circumstances, in our view, rightly denied by the Revenue in-as-much as the gain arising on the sale of the housing sites is assessable as business income under section 28 of the Act. Accordingly, the ground raised by the assessee is dismissed. 7. In the…

Iljin Automotive Private Limited, Kancheepuram vs. DCIT, Chennai

In the result, the assessee’s appeal is partly allowed

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddy

…ions. The manner and mode of repayment of a loan had nothing to do with the cost of an asset acquired by the assessee for the purpose of his business. The Apex court was speaking in context of a loan/borrowing. Again, in Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC), the Hon’ble Court held that where the foreign currency is held as capital asset or as fixed capital, the profit or loss would be capital in nature. Needless to add, it is the entire loss/gain suffered/accrued during the relevant year that would stand accounted for and claimed/offered. c) The exchange fluctuation loss, where in respect of circ…

Egger Pumps India Pvt Ltd., Coimbatore vs. ITO, Coimbatore

In the result, the appeal of the assessee is dismissed

Bench: Shri Chandra Poojari

…l loan as is clear from the loan agreement wherein the purpose of the loan is clearly mentioned to use it as a working capital to finance the activities of the company. As held by the hon'ble Supreme Court in the case of Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1, foreign currency fluctuation loss is allowable as deduction if the foreign currency is held on revenue account or as trading asset or as part of circulating capital employed in the 10 business. As regards the year of allowability, the claim has to be allowed on the basis of restatement of the liability on the balance- sheet date as held by the ho…

Bahwan Cybertek Private Limited, Chennai vs. ACIT, Chennai

In the result, the assessee’s appeal is partly allowed

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddyआयकर अपील सं./Ita No.290/Mds/2017 "नधा"रण वष" / Assessment Year : 2012-13

…substituted by Finance Act, 2002 w.e.f. 01.04.2003). It is only where the same is in respect of a trading asset, that the same would be in the nature of a trading loss, allowable u/s. 28, also relying on the decisions in Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC) and CIT v. Dempo & Co. Pvt. Ltd. [1994] 206 ITR 291 (Bom). Aggrieved, the assessee is in appeal. 8. We have heard the parties, and perused the material on record. There is, to begin with, no dichotomy between the decisions relied upon by the assessee and the Revenue. A trading loss shall arise, even if on restatement, to the extent it is qua…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

…the amount received by the assessee on account of forward contract in foreign currency was a capital receipt and not exigible to tax. According to the CIT(Appeals), the same view has been held in the case of M/s. Sutlej Cotton Mills Pvt. Ltd. vs. CIT (SC) (116 ITR 1), M/s. Tiruveni Engineering Works Ltd. vs. CIT ( 156 ITR 202)( Delhi) and Gujarat Narmadha Vally Fertilizers Ltd. vs. CIT (Ahd) ( 73 TTJ 787). 18.14 According to the CIT(Appeals), it is a settled position that a gain arising from a fixed capital is capital receipt and not chargeable to tax. It is taxable as revenue item, when it is preferable t…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

…the amount received by the assessee on account of forward contract in foreign currency was a capital receipt and not exigible to tax. According to the CIT(Appeals), the same view has been held in the case of M/s. Sutlej Cotton Mills Pvt. Ltd. vs. CIT (SC) (116 ITR 1), M/s. Tiruveni Engineering Works Ltd. vs. CIT ( 156 ITR 202)( Delhi) and Gujarat Narmadha Vally Fertilizers Ltd. vs. CIT (Ahd) ( 73 TTJ 787). 18.14 According to the CIT(Appeals), it is a settled position that a gain arising from a fixed capital is capital receipt and not chargeable to tax. It is taxable as revenue item, when it is preferable t…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

…the amount received by the assessee on account of forward contract in foreign currency was a capital receipt and not exigible to tax. According to the CIT(Appeals), the same view has been held in the case of M/s. Sutlej Cotton Mills Pvt. Ltd. vs. CIT (SC) (116 ITR 1), M/s. Tiruveni Engineering Works Ltd. vs. CIT ( 156 ITR 202)( Delhi) and Gujarat Narmadha Vally Fertilizers Ltd. vs. CIT (Ahd) ( 73 TTJ 787). 18.14 According to the CIT(Appeals), it is a settled position that a gain arising from a fixed capital is capital receipt and not chargeable to tax. It is taxable as revenue item, when it is preferable t…