Foreign exchange loss duly allowable as deduction

DCIT Vs Oscar Investment Ltd (ITAT Delhi)

ITAT Delhi held that AO duly accepted foreign exchange gain offered to taxation in earlier Assessment Year, hence AO cannot disallow foreign exchange loss assuming it to be a contingent loss in the year under consideration.

Facts-

The Revenue is aggrieved by the deletion of disallowance u/s 14A of the Income-tax Act, 1961 r.w.r 8D of the ITAT Rules, 1963 amounting to Rs. 5,52,52,182/- and secondly, the Revenue is aggrieved by the deletion of addition on account of disallowance of foreign exchange loss of Rs. 11,48,23,000/-.
AO noticed that assessee has earned income not forming part of total income in nature of dividend exempt u/s 10(34)/ 10(35) of the Act. Hence, the assessee was asked to explain why the disallowance should not be made as per section 14A r.w.r. 8D of the Rules.

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