ALLOWABILITY OF LOSS ARISING ON ACCOUNT OF FOREIGN CURRENCY
Last updated: 12 September 2008
Court :
SUPREME COURT OF INDIA
Brief :
The PSC is an independent accounting regime which includes tax treatment of costs, expenses, incomes, profits etc., it is because of the specific provision in the PSC for currency translation that loss/profit would accrue to an operator-company; often a company obtains profit not just from the “profit oil”, but also from “cost oil”, such profits cannot be ascertained without taking into account translation losses and accordingly the resultant translation gains/losses are required to be recognized under section 42(1) of Income-tax Act in terms of the PSC.
Citation :
CIT
v.
Enron Oil & Gas India Ltd.
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CHEZHIYAN
Published in Income Tax
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