03 June 2011
Hi expert .. Can u Please give me the Reference of Section of Income Tax Act regarding allowability of Foreign Exhange loss..... And also refer me one legal Dicision on allowability... Please give fast reply as much as possible
There is no specific section in Income Tax Act for such kind of Transaction. Since it is not a nature of specific expense so we can not say this can be caimed u/s 37 (i.e. general deduction. but charging section of B & P (Sec 28)covers the said transaction. Sec 28 says -
"The following income shall be chargeable to income-tax under the head “Profits and gains of business or profession”—
(i) the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year....
"The expression ‘profits and gains’ has to be understood in its commercial sense and there can be no computation of such profits and gains until the expenditure which is necessary for the purpose of earning the receipts is deducted therefrom."
By scope of Sec. 28 the Exp of Exchange loss can be claimed.
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