Summary
- The Karnataka High Court has upheld the Income Tax Appellate Tribunal's decision, allowing Mphasis Ltd. a 60% depreciation on switches and routers for the assessment year 2009-10.
- The Court dismissed the Income Tax Department's appeal, affirming that these devices qualify as integral computer peripherals under Section 32 of the Income Tax Act, 1961.
- Additionally, it ruled that foreign exchange losses from forward contracts amounting to Rs.26,31,35,000 are deductible business expenses, not speculative losses.
- This ruling reinforces the treatment of foreign exchange fluctuations in business accounting and could influence future tax assessments for similar cases.
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