Itta/284/2014 Of Commissioner Of Income Tax-Iii v. Vst Industries Ltd

HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.284 of 2014 Date: 23.04.2014 Between: Commissioner of Income Tax-III,Hyderabad .....Appellant AND M/s VST Industries Limited,Hyderabad ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.284 of 2014 JUDGMENT:(per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be preferred and admitted againstthe judgment and order of the learned Tribunal dated 23[rd] August,2013 in relation to the assessment year 2008-09 on the followingsuggested questions of law: (i) In the facts and circumstances of the case,whether the learned Tribunal is correct in law inholding that the loss/expenditure claimed by therespondent-assessee on account of fluctuation in therate of foreign exchange i.e., Market to Market (MTM)loss cannot be considered to be notional as per theCBDT instruction No.3 of 2010, when the said amountwas rightly disallowed by the Assessing Officer interms of proviso ‘D’ of Section 43(5) of the Act? (ii) In the facts and circumstances of the case,whether the learned Tribunal is correct in law indirecting the Assessing Officer to delete the subjectaddition made with regard to Market to Market (MTM)loss claimed by the respondent-assessee? We have heard the learned Counsel for the parties andhave gone through the judgment and order of the learnedTribunal. It appears that the learned Tribunal on fact found as follows: “The assessee is not a dealer in foreignexchange. The assessee is engaged in the businessof manufacturing and sale of cigarettes and in the process of its business activity it exports cigarettesto foreign countries. It is also a fact that for thepurpose of its export/import activities, the assesseehas entered into forward contracts with banks relatingto its export/import business transactions.” On aforesaid factual position, the learned Tribunalsconsistently held that the loss/expenditure claimed by theassessee on account of fluctuation in the rate of foreign exchangecouldn’t be considered to be notional by following the instructionNo.3 of 2010 of CBDT. Therefore, we do not find any element oflaw to be decided in this appeal. Accordingly, we dismiss the appeal. Miscellaneous petitionspending, if any, shall also stand closed. No order as to costs. ___________________ K.J. SENGUPTA, CJ __________________ SANJAY KUMAR, J 23-04-2014 Gsn