Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: cpt :: form 3cd :: due date for vat payment :: articles on VAT and GST in India :: list of goods taxed at 4% :: TDS :: VAT RATES :: Central Excise rule to resale the machines to a new company :: VAT Audit
 
 
General »
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind
 Pre-GST discounts get Maharashtra 16% more sales tax in three months
 Here’s how self-employed should efile their taxes
 Advance tax given by individuals in June quarter rises more than 40%

Foreign cos can claim tax deduction for forex losses: SC
September, 08th 2008

The Supreme Court has held that foreign companies can claim tax deductions for foreign exchange losses on account of currency fluctuations. A bench headed by Justice S H Kapadia while dismissing the Income tax department's petition held that the loss arising on account of "foreign currency translation" was allowable as deduction and the gains on the same account were also liable to be taxed in India.

The now bankrupt Enron Oil & Gas had along with Reliance Industries and state-run Oil and Natural Gas Corp (ONGC) had been awarded the Panna/Mukta and Tapti oil and gas fields off the Mumbai coast. Enron has since sold off its stake to BG Group of UK. According to the court, Enron, which was the operator of the field, made capital investments and proceeds from oil sales were used to recoup the operational costs and capital investment.
While stating that the oil used for this purpose was termed as "cost oil," Justice Kapadia said that often a company obtained profit not just from the "profit oil" but also from "cost oil."

"Such profits cannot be ascertained without taking into account translation (currency fluctuation) losses. Moreover, taxes are embedded in the profit oil. If these concepts are kept in mind then it cannot be said that translation losses under the production sharing contract are illusory losses," the judgement stated. The court also rejected the I-T department's argument that exchange losses on loans or other financing would not be admissible for deduction. "Cash call is not a loan. It is a contribution made into the account of the operator by each co-venturer in USD (dollars)," it added.

Enron and Reliance had 30 per cent stake each in the fields while the remaining 40 per cent was with ONGC.
Under Notification dated March 8, 1996, each co-venturer was liable to be assessed for his own share of income.
Enron had filed income tax returns for assessment year 1999-00 declaring its taxable income of more than Rs 71 crore under Section 115JA of the Income Tax Act. The assessing officer had disallowed the loss of more than Rs 38 crore on the ground that no loss was incurred by Enron and this was a mere book entry. However, Both CIT (A) and Income Tax Appellate Tribunal while allowing the loss of more than Rs 38 crore as deduction to the foreign company had held that just as foreign exchange gain was taxable so was loss allowable as deduction.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions