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Tax Publishers
Losses sustained due to re-export of goods
allowability
Facts:
Assessee
imported a raw material which on testing by customs authorities was found to be
hazardous. Accordingly the goods were detained and subsequently with a
compounding fee and penalty the said goods were permitted to be re-exported.
The prices of the raw material dropped with the exchange rate also impacting
the assessee into a loss eventually. Assessee while filing the return of income
disallowed the compounding fee and the penalty paid but claimed the loss
on re-export sale vis a vis the imported value which was disallowed by the
lower authorities. On higher appeal -
Held
in favour of the assessee on facts that the inventory loss which arose out of
the reexport of the detained shipment was an allowable expenditure under
section 37(1).
Case: Indian Synthetic Rubber (P) Ltd. v. ACIT 2023 TaxPub(DT) 2551
(Del-Trib)
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