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Issues:
1. Disallowance of airfare charges for the Chairman of the Company. 2. Claim for investment allowance on exchange rate difference for fixed assets. Issue 1: Disallowance of Airfare Charges The appeal by the revenue concerned the disallowance of airfare charges for the Chairman of the Company. The CIT(A) had deleted a portion of the disallowance, which was challenged by the revenue. The Tribunal noted that a similar issue had been decided in favor of the assessee for the assessment year 1989-90. The Tribunal affirmed the decision of the CIT(A) based on the precedent set by its earlier order and dismissed the ground raised by the revenue. Issue 2: Claim for Investment Allowance The second issue revolved around the claim for investment allowance on exchange rate differences for fixed assets. The assessee claimed that they had erroneously excluded exchange rate differences while calculating the investment allowance. The Assessing Officer rejected the claim based on a Supreme Court judgment. However, the CIT(A) accepted the claim, citing a similar case where the claim was allowed. The revenue challenged this decision on the grounds that the assets were acquired and installed in earlier years, and no allowance should be granted for the exchange rate difference. The Tribunal analyzed Section 43A(1) of the Income-tax Act and relevant case laws. It concluded that the claim for additional investment allowance due to increased costs from exchange rate fluctuations was valid, even if the assets were acquired in earlier years. The Tribunal upheld the CIT(A)'s decision to allow the investment allowance and dismissed the appeal filed by the Department. In conclusion, the Tribunal upheld the decisions of the CIT(A) in both issues, affirming the allowance of expenses and investment claims. The judgment provides a detailed analysis of legal provisions, precedents, and interpretations to support the decisions made.
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