Case Law Details
K. Uttamlal And Company Vs ACIT (ITAT Mumbai)
Introduction: The case of K. Uttamlal & Company vs ACIT (ITAT Mumbai) revolves around the disallowance of foreign exchange loss concerning buyer’s credit. The primary issue is the treatment of foreign exchange loss on the buyer’s credit payable by the assessee.
Detailed Analysis: The assessee contends that the foreign exchange loss has occurred on the amount payable as buyer’s credit, restated at the exchange rate as of 31/03/2012, after setting off gains following AS-11. The buyer’s credit, related to the import of items traded by the assessee, involves an import letter of credit limit of Rs. 14 crores with the bankers.
The contention includes the process where the assessee requests its bank to arrange funds under buyer’s credit and make payments for import bills. Despite providing details in the paper book, which were not considered due to filing delays, the Assessing Officer and CIT(A) upheld the addition.
The tribunal deems it appropriate to remand the issue to the Assessing Officer for a fresh adjudication, considering the details filed by the assessee. The decision for the assessment year 2012–13 allows the sole ground raised by the assessee for statistical purposes.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
