ITAT DENY TAX BENEFIT ON CURRENCY GAINS

A tax tribunal has turned down a software firm's proposal to claim tax benefit on currency gains it made on a foreign loan. The Income-tax Appellate Tribunal (ITAT) Delhi, a quasi-judicial authority, in an order last month in the case of Convergys India Services, held that the earnings from fluctuation arising from external commercial borrowing (ECB) cannot be classified as income from export activity of the company. Therefore, such income cannot be given the benefit provided under section 10 A of Income-tax Act, which till last financial year gave tax relief on income from export of software and other items.