Section 43A of the Income Tax Act

Income-tax Act, 2025: s.42

Section 43A of the Income-tax Act, 1961 corresponds to section 42 (Capitalising impact of foreign exchange fluctuation) of the Income-tax Act, 2025.

Read section 42 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 43A is K.C. Builders & Anr. v. ACIT (265 ITR 562), cited in 241 of the 273 judgments on BharatTax that turn on this section.

Leading authorities on Section 43A

K.C. Builders & Anr. v. ACIT
265 ITR 562 · 2004 · Supreme Court
241
citing judgments

When the addition made in the assessment order, on the basis of which a penalty for concealment under section 271(1)(c) is levied, is subsequently deleted, the penalty has no basis and must be cancelled.

ONGC v. CIT
376 ITR 306 · 2015 · Supreme Court
241
citing judgments

Income derived by a non-resident for services related to mineral oil operations, falling under the presumptive taxation regime of Section 44BB, cannot simultaneously be treated as fees for technical services under Section 9(1)(vii). The specific presumptive provisions override the general FTS definition, particularly when DTAA applies.

Dhanuka & Sons. v. CIT
339 ITR 319 · 2011 · High Court
100
citing judgments

Disallowance under Section 14A for expenditure incurred to earn exempt dividend income (under Section 10(34)) is permissible. The assessee bears the burden to show the source of funds for acquiring shares, regardless of whether those shares are old or recently acquired.

CIT v. Tata Iron & Steel Co. Ltd.
231 ITR 285 · 1998 · Supreme Court
81
citing judgments

The actual cost of an asset is distinct from the cost of borrowing money for its purchase. Foreign exchange fluctuations on loan repayment do not alter the asset's actual cost and are not covered by Section 43A.

4 ITO v. Abdul G Nadiadwala
311 ITR 405 · 2009 · High Court
29
citing judgments
CIT v. Industrial Finance Corporation of India Ltd.
185 Taxmann 296 · 2009 · High Court
27
citing judgments

A difference between a forward contract rate and the exchange rate on the date of entering into the contract for foreign currency is an ascertained and definite liability and thus eligible for deduction.

CIT v. Relaxo Footwears Limited
293 ITR 231 · 2007 · High Court
25
citing judgments

Expenditures are revenue in nature and deserve to be allowed as deductions if they are for commercial expediency.

CIT v. Raymonds Ltd.
71 DTR 265 · 2012 · High Court
20
citing judgments

The 'book profit' for the purpose of Section 115JA of the Income Tax Act, 1961, is the net profit as shown in the profit and loss account prepared in accordance with the Companies Act, 1956.

Akzo Nobel India Limited v. DCIT
71 Taxmann.com 57 · 2016 · ITAT
18
citing judgments

The Assessing Officer must first accept the arm's length price (ALP) declared by the assessee for international transactions with associated enterprises. Rejection of the declared ALP is an exception, requiring specific conditions to be met, such as those prescribed under section 92CA(3).

Hyundai Motor India Ltd. v. DCIT
81 Taxmann.com 5 · 2017 · Reported
15
citing judgments

Foreign exchange losses on reinstatement of foreign currency loans are allowable as revenue expenditure, provided they are recognised in accordance with applicable accounting standards. Exchange fluctuation losses attributable to depreciable assets acquired in India may also be allowable expenditure.

Judgments on Section 43A

M/S Aban Offshore Limited, Chennai vs. DCIT, Corporate Circle, Chennai

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

ITA 797/CHNY/2020[2011-12]Status: DisposedITAT Chennai08 Nov 2023AY 2011-12

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./It(Tp)A Nos.: 21/Chny/2022 & 40/Chny/2022 िनधा"रण वष" / Assessment Years: 2017-18 & 2018-19 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Tpo Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita Nos.: 797 & 798/Chny/2020 िनधा"रण वष" / Assessment Years: 2011-12 & आयकर अपील सं./Ita No.: 2757/Chny/2017 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita No.: 1672/Chny/2019 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of V. 113, Janpriya Crestpantheon Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. P. Murali Mohana Rao, Ca Assessee By Department By : Shri. A. Sasikumar, Cit सुनवाई क" तारीख/Date Of Hearing : 27.09.2023 घोषणा क" तारीख/Date Of Pronouncement : 08.11.2023

For Respondent: Shri. A. Sasikumar, CIT
Section 143Section 143(3)Section 144C(5)Section 147Section 148Section 37(1)

DCIT Corporate Circle 1(1), Chennai vs. Aban Offshore Ltd., Chennai

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

ITA 1672/CHNY/2019[2013-14]Status: DisposedITAT Chennai08 Nov 2023AY 2013-14

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./It(Tp)A Nos.: 21/Chny/2022 & 40/Chny/2022 िनधा"रण वष" / Assessment Years: 2017-18 & 2018-19 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Tpo Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita Nos.: 797 & 798/Chny/2020 िनधा"रण वष" / Assessment Years: 2011-12 & आयकर अपील सं./Ita No.: 2757/Chny/2017 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita No.: 1672/Chny/2019 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of V. 113, Janpriya Crestpantheon Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. P. Murali Mohana Rao, Ca Assessee By Department By : Shri. A. Sasikumar, Cit सुनवाई क" तारीख/Date Of Hearing : 27.09.2023 घोषणा क" तारीख/Date Of Pronouncement : 08.11.2023

For Respondent: Shri. A. Sasikumar, CIT
Section 143Section 143(3)Section 144C(5)Section 147Section 148Section 37(1)

Aban Offshore Limited, Chennai vs. DCIT Corporate Circle 1(1), Chennai

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

ITA 2757/CHNY/2017[2013-14]Status: DisposedITAT Chennai08 Nov 2023AY 2013-14

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./It(Tp)A Nos.: 21/Chny/2022 & 40/Chny/2022 िनधा"रण वष" / Assessment Years: 2017-18 & 2018-19 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Tpo Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita Nos.: 797 & 798/Chny/2020 िनधा"रण वष" / Assessment Years: 2011-12 & आयकर अपील सं./Ita No.: 2757/Chny/2017 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of 113, Janpriya Crestpantheon V. Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] आयकर अपील सं./Ita No.: 1672/Chny/2019 िनधा"रण वष" / Assessment Year: 2013-14 M/S. Aban Offshore Limited, Deputy Commissioner Of V. 113, Janpriya Crestpantheon Income Tax, Road, Egmore, Corporate Circle -1(1), Chennai – 600 008. Chennai. [Pan: Aaaca-3012-H] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. P. Murali Mohana Rao, Ca Assessee By Department By : Shri. A. Sasikumar, Cit सुनवाई क" तारीख/Date Of Hearing : 27.09.2023 घोषणा क" तारीख/Date Of Pronouncement : 08.11.2023

For Respondent: Shri. A. Sasikumar, CIT
Section 143Section 143(3)Section 144C(5)Section 147Section 148Section 37(1)

M/S Carborundum Universal Limited, Chennai vs. DCIT, Ltu-1, Chennai

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

ITA 757/CHNY/2023[2011-12]Status: DisposedITAT Chennai25 Jul 2023AY 2011-12

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. No. 757/Chny/2023 िनधा"रण वष"/Assessment Year: 2011-12 M/S. Carborundum Universal Limited, Vs. The Deputy Commissioner Of No. 43, Vi Floor, Parry House, Moore Income Tax, Street, Chennai G.P.O. Parrys, Ltu-1, Chennai, Chennai 600 001. Nfac, New Delhi. [Pan:Aaacc2474P] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Vijayaraghavan, Advocate ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 25.07.2023 घोषणा की तारीख /Date Of Pronouncement : 25.07.2023 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi Dated 27.04.2023 For The Assessment Year 2011-12. 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For The Assessment Year 2011-12 On 30.11.2011 Admitting A Total Income Of ₹.117,65,52,629/-. The Case Was Selected For Scrutiny & Assessment Under Section 143(3) R.W.S. 923Ca Of The Income Tax Act

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri D. Hema Bhupal, JCIT
Section 143(2)Section 143(3)Section 147Section 148Section 35Section 4Section 43A