- (1.) THE appeal is directed against the judgment and order dated 20.5.2013 by which the learned Income Tax Appellate Tribunal allowed the appeal of the assessee. Aggrieved by the order of the learned Tribunal the Revenue has come up in appeal.
(2.) THE following questions have been proposed; - a) Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in law in deleting the disallowance of loss on account of foreign exchange fluctuation as the loss on account of decrease in value of loan given to its sister concern due to foreign exchange fluctuation will not be allowed as business expenditure; b) Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in disallowance on account of foreign exchange fluctuation following the judgment in case of M/s. Woodward Governor India (P) Limited., reported in : 312 ITR 254 (S.C.) and directing that the Learned Assessing Officer should grant the Assessee the benefit of deduction on account of fluctuation in the rate of exchange; c) Whether on the facts and in the circumstances of the case, the Learned Tribunal is justified is deleting the addition made by the Assessee stating that actual consideration received by the Assessee for the shares sold is to be taken as "the full value of consideration" for the purpose of computing capital gain and not the market value of those shares; d) Whether on the facts and in the circumstances of the case, the order of Learned Tribunal is perverse, illegal and bad in the eye of law; It would appear that the first two questions are with regard to the order of the assessing officer and the CIT disallowing the loss on account of foreign exchange fluctuation whereas the third question is with regard to the value of consideration in respect of the shares sold by the assessee. The fourth question is too general in nature and can safely be ignored.
(3.) WITH regard to the first two questions the assessing officer expressed the following view while disallowing the loss arising out of foreign exchange fluctuation; - On going through the statement it is found that it has claimed foreign exchange loss of Rs. 31,10,124 on account of decrease in value of loan given to Gujarat NRE Australia PTY Ltd. and an amount of Rs. 22,32,924 on account of decrease in value of loan given to NRE Mining PTY Ltd., Australia. Since both these transactions are contingent in nature wherein a provision has been made in the amount of the loan as on 31.3.2005, the same is not allowable as a deduction while computing the income of the assessee. Moreover, this is merely a wrong statement of the loan account on the balance -sheet but as per the accounting standard being followed by the assessee company. Since the same is contingent in nature, the same is disallowed and added back in the total income of the assessee. The total disallowance on this account comes to Rs. 53,43,048.;