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which it has claimed the Forex loss amounting to Rs. 174.28 lakhs during the year under consideration. Hence, in regards to the above addition the following facts explaining the accounting treatment of the Forex Loss in accordance with amended AS-11 and supporting the claim of appellant are submitted:

(A) On the harmonious consideration of amendment dated 29.12.2011 to Accounting Standard (AS 11) on "Effects of changes in Foreign exchange Rates" issued by Ministry of Corporate Affairs (MCA) vide GSR Notification dated 29.12.2011 it can be deduced that the corporate are allowed to avail the option under Para 46A mentioned in the said notification in accordance to which the foreign exchange loss arising on restatement of any Foreign Currency Borrowing can be accumulated in FCMITDA and deferred over the period of long term liability, if such borrowings are utilized for the purpose other than that relating to the fixed assets. This means, that where a company have acquired any Foreign loan with a purpose to acquire or construct the asset and if due to any movement in the exchange rates of the foreign currency and the reporting currency the revaluation of balance of loan is made, then any gain or loss arising out of such revaluation can be adjusted to the cost of asset so acquired or constructed. However, the amount of loss pertaining to the balance of loan not utilized for acquisition or construction of fixed assets can be accumulated in FCMITDA and deferred over the period of loan and the portion of accumulated loss can be written off in the Profit & Loss Account annually.

7. We have duly considered rival contentions and gone through the record carefully. Basically, the stand of the assessee is that Ministry of Corporate Affairs (MCA), Govt. of India has issued a notification on 29.12.2011 explaining effects of changes in foreign exchange rates; how these facts are to be considered under Accountant Standard 11 (AS-11). According to this notification, if a company has acquired any foreign loan with a purpose to acquire or construct asset, and if due to any movement in the exchange rates of the foreign currency and the reporting currency the revaluation of balance of loan is made, then any gain or loss arising out of such revaluation can be adjusted to the cost of asset so acquired or constructed. However, the amount of loss pertaining to the balance of loss not utilized for acquisition or construction of fixed assets can be accumulated in Foreign Currency Monetary Item Transition Difference Account (FCMITDA). It may be deferred over a period of loan and the portion of accumulated loss can be written off in the profit & loss account annually. On the strength of this circular, the assessee has worked out un-utilised loan for capital assets, and how that has been accumulated and deferred over the period of loan. This working has been reproduced by the ld.CIT(A) while taking cognizance of the assessee's submission. In this background, if we examine the order of the ld.CIT(A), then it would reveal that the ld.CIT(A) has examined the facts in right prospective while deleting the disallowance. The AO was of the view that such loss arose out of foreign currency loan acquired in respect of fixed assets. He failed to appreciate real transaction, and how the loss has been worked out by the assessee. In earlier year, the Tribunal has upheld deletion, and therefore, we do not see any reason to interfere in the order of the ld.CIT(A)."