Sec. 37(1) of the Income-tax Act, 1961 — Business expenditure – Revenue preferred tax appeal against the order of Tribunal in confirming the order of CIT and allowing the claim of the Assessee of Rs. 35,42,20,000/- as foreign exchange fluctuation loss under Section 37 of the Act. High Court dismissed the appeal of the revenue holding that ”the disallowance could not have been without a preceding inquiry into the claim made by the Assessee. In fact the ITAT in its order noted the submission on behalf of the Assessee that as against US $ 10 million given as loan it received US$10,01,50,000 and US$ 1,50,000 was offered as income of the Assessee for the current AY which was accepted by the AO. However, due to fluctuation in the rate of $ vis-a-vis Rupee, the Assessee realized Rs. 443,07,10,000/-. The difference between the Rupee value of the 10 million US$ advanced in 2008 and received back in 2010 was Rs. 35,42,20,000/-. This difference was claimed as loss on account of foreign exchange fluctuation. Therefore, the CIT and ITAT were right in reversing the above disallowance“. SLP of revenue also dismissed. - PR. CIT V/s ALBASTA WHOLESALE SERVICES LTD. - [2020] 272 TAXMAN 105 (SC)