banner_ad

43a of income tax act

Tax queries 856 views 3 replies

A manufacturing company has purchased an imported machinery through Buyers credit (Foreign Loan).

What treatment should be given to the loss/gain arising out of exchange difference on repayment of Loan U/S 43A of Income Tax Act.

   Please mention applicable case law.

Replies (3)

The exchange difference (relating to principal component) to be added / deducted to/from the WDV of the Asset as & when the principal is actually repaid ....further the same to be reported in Fixed Asset schedule of 3CD report...

no case law  ...because the provision is very clear

The management is considering the loss/gain on foreign exchange till the acquired asset is put to use. They capitalize the same till the date of put to use. But they transfer the loss/gain on foreign exchange to P&L a/c, AFTER the asset is put to use(commercial production started) also when the loan is repaid. Their contention is that repayment of loan does not have any relation ship with asset. So they do not capitalize the loss/gain on foreign exchange. Plz express your views
Originally posted by : Saurabh Maheshwari
The exchange difference (relating to principal component) to be added / deducted to/from the WDV of the Asset as & when the principal is actually repaid ....further the same to be reported in Fixed Asset schedule of 3CD report...

no case law  ...because the provision is very clear

 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 02 May 2026
Senior Executive

hitesh chandwani & co

Pune

B.Com

View Details
Company
Featured 29 April 2026
Manager- Finance and Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured ARTICLESHIP 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details