| Case ID |
2b287ee5-8248-45e4-ac39-10291922b2b3 |
| Body |
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| Case Number |
IT REFERENCE No. 513 OF 1975 |
| Decision Date |
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| Hearing Date |
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| Decision |
The court held that the impugned loss was not admissible as a deduction in the assessment year 1967-68. The facts indicated that the devaluation loss claimed by the assessee, a non-resident company with its head office in Yugoslavia, could not be recognized as a revenue loss in the relevant assessment year. The Tribunal's view that the loss represented a trading loss was incorrect as the repatriation of funds occurred beyond the relevant assessment year. The court emphasized that the loss must be accounted for in the year of actual repatriation, not merely the year in which devaluation occurred. Consequently, the question was answered in favor of the revenue, denying the claim for the deduction of the loss in the assessment year 1967-68. |
| Summary |
This case involves a non-resident company, Invest Import, claiming a devaluation loss due to the depreciation of the Indian rupee against the Yugoslavian dinar. The court examined the circumstances surrounding the assessment year 1967-68, where the assessee sought to deduct a substantial loss arising from currency devaluation. The Income Tax Officer initially disallowed the deduction, stating that the loss could not be considered in that assessment year since the actual remittance of funds occurred later, in 1968. The Tribunal later allowed the claim, viewing the loss as a trading loss. However, the High Court ultimately ruled that the loss could not be recognized in the assessment year in question, focusing on the timing of the repatriation of funds and the nature of the loss. This case highlights the complexities of currency valuation in international business operations and the implications for tax deductions in cross-border transactions. Key terms include 'devaluation loss', 'income tax', 'trading loss', and 'non-resident company', which are trending topics in tax law discussions. |
| Court |
Calcutta High Court
|
| Entities Involved |
Commissioner of Income Tax,
Invest Import
|
| Judges |
Sabyasachi Mukharji, J.
|
| Lawyers |
S.C. Sen,
M.L. Bhattacharjee
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Invest Import
|
| Citations |
1982 SLD 1247,
(1982) 137 ITR 310
|
| Other Citations |
CIT v. Mogul Line Ltd. [1962] 46 ITR 590 (Bom.),
Indo-Burma Petroleum Co. Ltd. v. CIT [IT Reference No. 57 of 1977 decided by the Calcutta High Court on 11-9-1980],
Badridas Daga v. CIT [1958] 34 ITR 10 (SC),
Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC),
CIT v. Canara Bank Ltd. [1967] 63 ITR 328 (SC),
Imperial Tobacco Co. Ltd. v. Kelly [1943] 25 TC 292,
Pohoomal Bros. v. CIT [1958] 34 ITR 64 (Bom.),
Radio Pictures Ltd. v. IRC [1937] 22 TC 106 (KB),
Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC)
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| Laws Involved |
Income-tax Act, 1961
|
| Sections |
28(i)
|