Jurisprudentiol – Thursday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.WITH nothing but budget being important in last few days, we had held back many judicial decisions. We will resume them from tomorrow. But here is a case from Supreme Court which we cannot hold back till tomorrow. So here it is today.

This case had a zigzag movement.

1. AO held against the assessee

2. CIT(A) held in favour of the assessee.

3. ITAT held against the assessee.

4. High Court held in favour of the assessee

5. Supreme Court held against the assessee.

Income Tax

Exchange differences are required to be capitalized if liabilities are incurred for acquiring fixed asset, like plant and machinery:

ACCORDING to Indian Accounting Standards by Dolphy D'Souza, roll over charges are indicative of the increase or decrease in the liability of the company in the next specified period, generally of six months. Roll over charges represent the difference arising on account of change in foreign exchange rates. Roll over charges paid/ received in respect of liabilities relating to the acquisition of fixed assets should be debited/ credited to the asset in respect of which liability was incurred. However, roll over charges not relating to fixed assets should be charged to the Profit & Loss Account.

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