Foreign Exchange Loss on Import Creditors Allowed Despite No Business: ITAT Delhi

Donyi Polo Timbers Pvt. Ltd. Vs ITO (ITAT Delhi) ITAT Delhi Allows Forex Loss of Rs.1.19 Cr – Consistent Accounting Method Upheld- Exchange Loss on Import Creditors Allowed Despite No Business Assessee had imported machinery from overseas suppliers during F.Ys. 2009-10 & 2010-11. Due to proceedings initiated by the Directorate of Revenue Intelligence (DRI), its banker did not permit remittance of outstanding dues to foreign suppliers. As per mercantile system of accounting consistently followed, Assessee recorded outstanding creditors in foreign currency at year-end exchange rate & d...