Exchange loss on refund of advances from customer allowable irrespective of use of funds

DCIT Vs. Diamond ‘R’ US (ITAT Mumbai) – Exchange loss on refund of advances received from the customers is concerned, the same indeed constitutes admissible deduction irrespective of whether or not the amount so received were diverted to use by partners. It is so for the elementary reason that the proximate cost of loss having been incurred is receipt of advances from the customers and refunding the same-an exercise which is clearly in the course of normal business operations. As the ld counsel for the assessee very appropriately puts it, the deduction for exchange loss cannot be inf...