Loss arising from fluctuation of foreign exchange rate was claimed as deductible by the assessee following the judgement of the Supreme Court in the case of CIT v. Woodward Governer India Pvt. Ltd (2009) 312 ITR 254 (SC). In the course of the hearing before the High Court, the department’s counsel urged that the conditions set out in Woodward Governer were not satisfied. Held that this allegation of the department’s Council was not urged in the appeal and could, therefore, not be gone into by the High Court. It was further noted that in the year in which fluctuation of foreign exchange rate resulted in gains, the same were offered to tax by the assessee. Accordingly, the department’s appeal was dismissed. (AY. 2010-11)