Foreign exchange Query

Good Question !

After Amendment in AS-11 and Ssch VI , FOREX diff arising in  liability towards purchase of Fixed assets is written off  to P&L is mandatory.

But for Income tax  all expenses incurred towards Purchase of Capital Asset ( inc Such FOREX Diff) is Capital Expenditure and therefore not allowed to be written off in P&L.Even if it charged it is Disallowed. Similar diff between Accounting and taxation exist is other areas ( e.g Treatment of  Borrowing Cost, Leases etc