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TMI Blog2002 (4) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled to investment allowance in respect of the amount paid as a result of the fluctuation in exchange rate?" - "(iii) Whether the amount of Rs. 28,79,813 claimed by way of exchange loss consequent to the fluctuation in exchange rate was allowable as a deduction?" - The said question (i) is, therefore, answered in the affirmative against the Revenue and in favour of the assessee. - Question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Ahd of 1987. At the instance of the Commissioner of Income-tax: "(ii) Whether the assessee is entitled to investment allowance in respect of the amount paid as a result of the fluctuation in exchange rate?" R. A. No. 804/Ahd of 1987. At the instance of the assessee "(iii) Whether the amount of Rs. 28,79,813 claimed by way of exchange loss consequent to the fluctuation in exchange rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ashdown and Co. Ltd. [1997] 224 ITR 353 (SC), the decision of this court in Cibatul Ltd's case. [1978] 115 ITR 879 was approved. The decision in Alcock Ashdown and Co. Ltd.'s case [1997] 224 ITR 353 (SC) was followed by the Supreme Court in CIT v. Karnataka Power Corporation [2001] 247 ITR 268. In the above view of the matter, we hold that the Tribunal was right in holding that the cost of plant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was wrong in holding that the assessee was entitled to the deduction of investment allowance on the amount of additional liability. It was held that no question of reducing the full amount of the investment allowance which was already worked out in the relevant previous year can ever arise by virtue of any subsequent fluctuation in the exchange rate. Relying on the decision of this court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early referable to liability of a capital nature and not to liability on revenue account. It was held that the Tribunal was right in holding that the said additional liability was not revenue expenditure. For the same reasons, we hold that the amount of Rs. 28,79,813 claimed by way of exchange loss consequent to the fluctuation in exchange rate was not allowable as deduction. Question No. (iii) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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