Case Law Details
Adani Petronet (Dahej) Port Pvt. Ltd Vs DCIT (ITAT Ahmedabad)
Held that M2M loss on SWAP contract was allowable where loans were converted into foreign currency loan to take benefit of low interest rate and loss recognized on account of foreign exchange fluctuation as per notified Accounting Standard 11 was an accrued and subsisting liability and not merely a contingent or hypothetical liability.
Facts- The assessee, is a company which is engaged in the business of development, operation and maintenance of a solid cargo terminal at Dahej. The ROI filed declaring a loss of (-) Rs.94,55,91,217/- which was subsequently revised to (-) Rs.94,24,26,666/-. AO noticed that the assessee has continued to invest Rs.10 crores, the income of which were exempt from tax. No disallowance on account of expenses incurred about the investment was offered by the assessee as required by the provisions of Section 14A of the Act read with Rule 8D. AO made disallowance of Rs.29,03,478/- u/s 14A of the Act on account of expenses incurred about the investment of Rs.10 crores by applying Rule 8D.
The disallowance was challenged by the assessee in an appeal before CIT(A). CIT(A) deleted the said disallowance. Revenue preferred the appeal before Tribunal on the following ground –
1. Deletion of disallowance u/s 14A read with rule 8D;
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