Assessee-company was constituted as a special purpose vehicle to carry out foundational tasks for setting up a coal based power plant. Assessee had not commenced any business activity during relevant period to assessment year. Assessee had entered into contract for purchase of plant and machinery from abroad. In relation to such purchase, on account of cancellation of contracts and on account of notional adjustment, due to favourable fluctuation of foreign exchange rate, assessee had gained certain income. AO accepted the contention of the assessee. CIT revised the order and directed the AO to redo the assessment. The Tribunal held that the imports made by the assessee were part of the project of setting up power plant. It was recorded that, the business of the company had not commenced during period relevant to assessment year in question. The profit or loss which arose to an assessee on account of appreciation or depreciation in the value of foreign currency held as capital asset which was liable to be treated as capital in nature. Accordingly the order of AO is affirmed.  On appeal the High court also affirmed the order of the Tribunal. (AY. 2009 -10)