The Commissioner Of Income Tax – 6, Mumbai v. M/S.metro Exporters Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2467 OF 2011 The Commissioner of Income Tax – 6, Mumbai..Appellant. Versus M/s.Metro Exporters Private Limited ..Respondent. Mr.Suresh Kumar for the appellant.Ms.Vasanti B. Patel for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 6[th] March 2013 P.C. : 1.In this appeal by the Revenue for assessment year 2003-04, following questions of law have been proposed for our consideration. “a)Whether, on the facts and in the circumstances of the case, the Tribunal, in law, was justified in setting aside the issue of inclusion of exchange rate gain on forward contract entered into by the assessee, for the purpose of computation under Section 80HHC, to the file of the AO with a direction to follow the judgment of the Tribunal in the case of CIT V/s. Badridas Gauridu (P) Limited (261 ITR 256) ?Tribunal, in law, was justified in setting aside the issue of inclusion of exchange rate gain on forward contract entered into by the assessee, for the purpose of computation under Section 80HHC, to the file of the AO with a direction to follow the judgment of the Tribunal in the case of CIT V/s. Badridas Gauridu (P) Limited (261 ITR 256) ? b)Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of CIT (A) in favour of the assessee company, the issue of exclusion of foreign exchange gain in respect of export profit from the export turnover for the purpose Tribunal was justified in upholding the order of CIT (A) in favour of the assessee company, the issue of exclusion of foreign exchange gain in respect of export profit from the export turnover for the purpose 2.In so far question (a) is concerned, the Tribunal by the impugned order has followed the decision of this Court in the matter of Commissioner of Income Tax V/s. Badridas Gauridu (P) Limited reported in (2003) 261 ITR 256 (Bom) to hold that exchange rate gain on forward contract is business income. Accordingly, the Tribunal held that the foreign exchange gain would be export profit and, hence, cannot be excluded from export turnover under Section 80HHC of the Income Tax Act, 1961. In view of the above, we see no reason to entertain question (a). 3.In so far as question (b) is concerned, counsel for the parties state that this issue is covered in favour of the assessee and against the Revenue by the decision of this Court in the matter of Commissioner of Income Tax V/s. Gem Plus Jewellery India Limited reported in (2011) 330 ITR 175 (see page 183). In that view of the matter, we see no reason to entertain question (b). 4.Accordingly, the appeal is dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)