Where assessee had debited unrealized loss due to foreign exchange fluctuation in foreign currency transaction on revenue items to its profit and loss account on the last date of accounting year, the same should be allowed as deduction under section 37(1).
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. Draft amendment is allowed.
2. Tax Appeal is admitted for consideration of following substantial questions of law:
“A. Whether the Tribunal erred in law and on facts in granting the deduction u/s 80IB of the Act on duty draw back of Rs. 18,01,67,542/-?
B. Whether the Tribunal erred in law and on facts in granting the deduction u/s. 80IB of the Act of Rs. 28,54,26,054/- on interest income on FDI/ICD?
C. Whether the Tribunal erred in law and on facts in deleting the addition made on account of upward adjustment u/s. 92CA(3) of the Act on account of guarantee fee on loans availed by AEs of Assessee against guarantee of Assessee?”
3. Revenue has proposed following three additional questions:
“1. Whether the Tribunal erred in law and on facts in deleting the disallowance of Rs. 22,15,55,371/- being national loss on outstanding forex derivatives contracts as on 31.03.2009?
2. Whether the Tribunal erred in law and on facts in granting the deduction u/s. 80 IB of the Act of Rs. 2,18,97,496/- on interest income received from debtors?
3. Whether the Tribunal erred in law and on facts in granting of tax credit of Rs. 1,62,26,344/- & Rs. 1,05,43,697/- in respect of royalty income not claimed in original return of income nor claimed in revised return of income?”
4. These questions are however not considered for the following reasons:
The decision of the Tribunal with respect to question No.1 is in conformity with the decision of Supreme Court in case of Commissioner of Income Tax vs. Woodward Government India P. Ltd reported in (2009) 312 ITR 85 (SC). Sofar as question 2 is concerned, the Tribunal has correctly followed the decision of this Court in case of Nirma Industries Ltd vs. Deputy Commissioner of Income Tax reported in (2006) 284 ITR 401 Guj. So far as question No. 3 is concerned, the Tribunal referred to the judgement of Supreme Court in case of Goetz (India) Ltd. vs. CIT reported in (2006) 284 ITR 323 (SC) to entertain additional contention. Reference in this respect can be made by this Court in the decision in case of Commissioner of Income Tax vs. Mitesh Implex reported in (2006) 367 ITR 85 (Guj).
5. These three questions are therefore not entertained.
6. To be heard with Tax Appeal No. 999 of 2017.