Treatment of the gain of foreign exchange fluctuation under the Income Tax Act

Last updated: 29 June 2021
Quick Summary
This case concerns the tax treatment of gains arising from foreign exchange fluctuations. The Assessing Officer initially classified these gains as 'revenue receipts', but the Commissioner of Income Tax (Appeals) reversed this decision, treating them as 'capital receipts'. The appeal tribunal reviewed this decision, considering whether the forward contract was entered into for capital assets and if the gains were indeed capital in nature.

Court :
ITAT Ahmedabad

Brief :
This appeal by Revenue is directed against the order of learned Commissioner of Income Tax (Appeals)-1, hereinafter referred as “ld. CIT(A)” Surat dated 27.02.2017 for the assessment year (AY) 2012-13. The Revenue has raised the following grounds of appeal:

Citation :
ITA No.1209/AHD/2017 (AY 2012-13)

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1 Year PLAN
1999
(Excl. of GST ₹359)

BEST VALUE
2 Years PLAN
3499
(Excl. of GST ₹629)

3 Months PLAN
999
(Excl. of GST ₹179)

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