Compensation paid due to fluctuation loss is allowable business expense

Assab Sripad Steels Private Limited Vs CIT -1 (Madras High Court) Madras High Court held that compensation paid to agent on account of loss due to fluctuations in foreign exchange rate is allowable as business expense under section 37 of the Income Tax Act. Accordingly, disallowance of the same is not justified and liable to be deleted. Facts- The assessee filed its return of income for the assessment year 2004­05 on 30.10.2004, declaring income of Rs.92,91,066/-. AO passed an order, dated 27.12.2006, disallowing expenditure under three heads of account to the tune of Rs.81,63,659/-. The sub...