IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 730 of 2011 For Approval and Signature:
HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= COMMISSIONER OF INCOME TAX-III - Appellant(s) Versus NABROS PHARMA PVT LTD - Opponent(s) ========================================================= Appearance :
MS PAURAMI B SHETH for Appellant(s) : 1, None for Opponent(s) : 1, =========================================================
CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI
and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 01/08/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI)
1. We have heard Ms. Paurami Sheth, learned counsel for the Revenue in this Tax Appeal. This Tax Appeal has been filed on the following proposed question of law:
“Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to include Exchange rate difference of Rs.22,21,415/- for computation of deduction u/s.80HHC?”
2. The assessment order was passed on 14.12.2007 by which the Assessing Officer held that the difference of exchange rate was not informed to the assessee. Aggrieved against the order of the Assessing Officer, assessee has filed appeal before CIT(A), which has allowed the deduction by order dated 14.07.2008. Revenue preferred a second appeal before the Tribunal. The Tribunal recorded a finding of fact in paragraph No.6, which is extracted as under:
“6. On hearing both the sides we are of the view that the A.O. Had not correctly appreciated all those facts which were claimed to have been placed before him vide a detailed letter dated 10.12.2007. It was explained that at the end of the year there was outstanding sale consideration. The same was converted into Indian Currency from foreign currency at the prevailing exchange rate and duty recorded in the books as it was consistently done in the past. Thereafter, the difference between the exchange rate and the actual realization was either debited or credited to Currency Rate Difference A/c. It was also informed that the said method of accounting was as per the Accounting Standard 11 prescribed. Hence the Currency Rate Difference was claimed as business income for the purpose of computation of deduction u/s. 80HHC. Case Laws relied upon were CIT vs. Amba Impex 282 ITR 144 (Guj.). Gami Exports 94 TTJ 557 (Ahd). Along with a copy of this letter the assessee has also placed before us a chart to explain that the realisation was done with in the statutory period. Assessee has annexed “Bank Certificate of Export and Realization”. Once all such details were very much available before the lower authorities then it not fair on the part of the Revenue to again challenge those factual findings. Applying the principle laid down by the Hon'ble Courts Ld. CIT(A) has rightly allowed the claim.
Resultantly this ground is hereby dismissed.
3. Having heard learned counsel for the appellant, we are of the considered opinion that the currency rate difference was satisfactorily explained by the assessee and he has claimed the currency rate difference as business income and has also annexed bank's certificate of export and realisation and all the details submitted by the assessee were accepted by the CIT(A). CIT(A) has rightly held that the foreign exchange rate difference received by the assessee has got direct nexus with the export sale proceeds. The convertible foreign exchange was received due to export business only. Foreign exchange was also received within the time allowed. Therefore, the assessee was entitled for benefit under section 80HHC of the Income Tax Act, 1961. The proposed question did not raise any substantial question of law. The appeal is concluded on finding of fact and is accordingly dismissed as no substantial question of law arises for consideration of this court.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)