Tribunal held that regarding the allowability of foreign exchange loss arising on conversion of outstanding balance in foreign exchange at the end of the year into Indian currency on account of outstanding unsecured loans, it is not clear whether the loans were raised towards acquisition of capital assets or for working capital requirements, nor whether the assets acquired were within India or in other countries; as section 43A of the Act starts with the non-obstante clause and is mandatory in nature, foreign exchange loss has to be treated thereunder provided the conditions given in the section are met. (AY. 2011-12)
Shin-Etsu Polymers India P. Ltd. v. Dy. CIT (2020) 83 ITR 64 (SN) (Chennai)(Trib.)
S. 43A : Rate of exchange-Foreign currency-Loss on conversion of outstanding foreign exchange currency into Indian rupees at end of year on account of outstanding unsecured loans-Matter remanded to Assessing Officer to examine facts whether loss was on capital account or revenue account. [S. 254(1)]