The Commr. Of Income Tax, City-Viii v. M/S.enercon India Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 452 OF 2005 The Commr. Of Income Tax, City-VIII... V/sM/s.Enercon India Ltd. ..... ....... ......Appellant ......Respondent. Mr.Suresh Kumar i/by Mr.Pankaj Kapoor, Adv. For the appellant.Mr.J.D.Mistry i/by M/s. Mulla & Mulla, Adv. For the respondent. CORAM:SWATANTER KUMAR, C.J. &A.P.DESHPANDE, J.DATED: 29[th] JULY 2008. PC: In the present appeal following question of law is raised: “Whether in the facts and circumstances of the case, theHon' ble I.T.A.T. Was right in law in deleting the addition madeon account of disallowance of loss on account of foreignexchange forward contract?” On this ground the order of the Tribunal is impugned in the presentappeal. The Tribunal while accepting the arguments advanced onbehalf of the assessee relying upon decisions in the case of Asian Chemicals Company,194 ITR 634 (Bom) and Kamani Tubes Ltd.207 ITR 298 (Bom) has answered this question and held that theloss incurred by the assessee on foreign exchange forward contract isdisallowable on the ground that it was in the nature of a speculativeloss. However finding of fact was also recorded that the assessee hadcancelled the contract as it was not possible for the assessee companyto remit the amount on the specified date and therefore the amountthat has been paid by the assessee company was in the nature of thedamages for breach of contract. 2.The view taken by the Income Tax Tribunal is consistent with itsearlier view and is in consonance with the Judgment of DivisionBench of this Court. Further it has recorded the findings of fact. Inour opinion no question arises for consideration. Hence appeal standsdismissed. CHIEF JUSTICE A.P.DESHPANDE, J.