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TMI BlogSpecial provisions consequential to changes in rate of exchange of currencyX X X X Extracts X X X X X X X X Extracts X X X X ..... e time of acquisition of the asset) at the time of making payment- ( a ) towards the whole or a part of the cost of the asset; or ( b ) towards repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset along with interest, if any, the amount by which the liability as aforesaid is so increased or reduced during such previous year and which is taken into account at the time of making the payment, irrespective of the method of accounting adopted by the assessee, shall be added to, or, as the case may be, deducted from- ( i ) the actual cost of the asset as defined in clause ( 1 ) of section 43; or ( ii ) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s,- ( a ) rate of exchange means the rate of exchange determined or recognised by the Central Government for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; ( b ) foreign currency and Indian currency have the meanings respectively assigned to them in section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). Explanation 2 .- Where the whole or any part of the liability aforesaid is met, not by the assessee, but, directly or indirectly, by any other person or authority, the liability so met shall not be taken into account for the purposes of this section. Explanation 3 .- Where the assessee has entered into a contract with an authorised dealer as defined in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or reduction in the liability of the assessee as expressed in Indian currency for making payment towards the whole or a part of the cost of the asset or for repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset (being in either case the liability existing immediately before the date on which the change in the rate of exchange takes effect), the amount by which the liability aforesaid is so increased or reduced during the previous year shall be added to, or, as the case may be, deducted from, the actual cost of the asset as defined in clause (1) of section 43 or the amount of expenditure of a capital nature referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture date at the rate of exchange specified in the contract to enable him to meet the whole or any part of the liability aforesaid, the amount, if any, to be added to, or deducted from, the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset under this sub-section shall, in respect of so much of the sum specified in the contract as is available for discharging the liability aforesaid, be computed with reference to the rate of exchange specified therein. (2) The provisions of sub-section (1) shall not be taken into account in computing the actual cost of an asset for the purpose of the deduction on account of development rebate under section 33.' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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