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Section 252 of the Income-tax Act, 1961 - Appellate Tribunal - General - Assessment year 1998-99 - Dismissal of rectification application under section 254(2) by Tribunal without appreciating alternative submission of assessee was not justified [Matter remanded] The assessee's claim for deduction of the foreign exchange fluctuation loss was disallowed by the Assessing Officer. The Tribunal also upheld the disallowance. On appeal, the High Court took view that the assessee should file application under section 254(2) before the Tribunal. Thereafter the assessee filed an application under section 254(2) before the Tribunal but same was dismissed. Held that in the light of the orders passed for the earlier assessment years 1996-97 and 1997-98 as also having regard to the assessment orders passed in the following year 1999-2000 and in view of the of Apex Court in the case of CIT v. Woodward Governor India (P.) Ltd. [2009] 312 ITR 254 , the Tribunal was wrong in refusing to rectify its own order under section 254(2) particularly when it had failed to appreciate that, the expenditure could have fallen on the capital account, which was specifically pleaded by the assessee as an alternate submission. The Tribunal was directed to decide the matter de novo in accordance with the law laid down in the case of CIT v. Woodward Governor India (P.) Ltd. [2009] 312 ITR 254 / 179 Taxman 326(SC) as well as on the merits of the case. CASE REVIEW Perfetti Van Melle India (P.) Ltd. v. CIT [2008] 296 ITR 595 (Delhi) set aside. CASES REFERRED TO Perfetti Van Melle India (P.) Ltd. v. CIT [2008] 296 ITR 595 (Delhi) and CIT v. Woodward Governor India (P.) Ltd. [2009] 312 ITR 254 (SC). Ajay Vohra and Ms. Kavita Jha for the Petitioner. R.P. Bhatt,…

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