High Court Of Rajasthan : Jaipur Bench
Dhadda & Co. vs. CIT
Asst. Year 1982-83
Y.R. Meena & A.C. Goyal, JJ.
D.B. IT Ref. Appln. No. 55 of 1987
31st January, 2002
N.M. Ranka, for the Applicant : J.K. Singhi, for the Respondent
BY THE COURT :
On an application filed under s. 256(1) of the IT Act, 1961, the Tribunal has referred the following question for the opinion of this Court : “Whether, in the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee was entitled to claim the amount in question as deduction on account of difference in the exchange rate by devaluation on 22nd Dec., 1981, which was about two months after the close of the accounting year?”
2. The relevant assessment year is 1982-83. The assessee claimed a loss of Rs. 1,05,329 on account of difference in the exchange rate in trade in rough emerald account. The ITO disallowed the claim of the assessee on the ground that the assessee is following the mercantile system of accounting and actually the payment has been made on 22nd Dec., 1981, which did not fall in the relevant accounting year and that the loss suffered on account of difference in the exchange rate also comes after close of the accounting year. In appeal before the AAC, the AAC has also confirmed the view taken by the ITO. The Tribunal has also confirmed the view taken by both the authorities below. While confirming the view taken by both the authorities below, Tribunal has specifically found that devaluation of the rupee took place on 22nd Dec., 1987 (sic-1981), whereas the assesseeâs accounting year closed on Diwali, i.e., two months before that devaluation. Considering the submissions of the learned counsel for the Revenue and material on record, no interference is called for in the view taken by the Tribunal. In the result we answer the question in affirmative i.e., in favour of the Revenue and against the assessee. The reference so made stands disposed of accordingly.
[Citation : 258 ITR 739]