Tribunal held that Under article 265 of the Constitution of India, only legitimate tax can be recovered and even a concession by a taxpayer does not give authority to the tax collector to recover more than what is due from him. CBDT Circular No. 14(XL35) dated April 11, 1955 states that officers of the Department must not take advantage of the ignorance of an assessee as to its rights and that they shall draw his attention to any refund or relief to which the assessee appears to be clearly entitled and which he has omitted to claim.

Allowing the assessee’s appeal, that the assessee filed a letter seeking the deduction towards foreign exchange loss. The Commissioner (Appeals) could have considered the claim of the assessee. The loss up to March 31, 2013 was at Rs. 20,63,782 and for the year ended March 31, 2014 cumulatively it was Rs. 62,60,284. Thus, the loss relating to the assessment year under consideration was only Rs. 41,96,702. The loss relating to the relevant assessment year alone and not the cumulative amount was allowable, i. e., of Rs. 41,96,702 only. Accordingly, the Assessing Officer was directed to grant deduction of foreign exchange loss only to that extent. (AY.2014-15)