1996 (3) TMI 17

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..... al referred the following question of law for the opinion of this court under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduct a sum of Rs. 49,108 and Rs. 2,315 being extra amount and interest respectively payable on account of exchange fluctuation in respect of long-term loans taken for purchase of plant .....

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..... the claim of the assessee to deduct the expenditure as revenue expenditure was rightly disallowed. Before us, learned counsel appearing for the assessee submitted that the interest payment of Rs. 2,315 should at least be allowed as revenue deduction. This was claimed on the basis of the decision of the Supreme Court in Bombay Steam Navigation Co. (1953) Pvt. Ltd. v. CIT [1965] 56 ITR 52. The qu .....

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..... e assessee claimed depreciation by treating the interest payment as capital and now in view of the abovesaid decision of the Supreme Court, the assessee claimed that it should be treated as revenue expenditure. The same item of expenditure cannot be treated for one purpose as capital in nature and for another purpose as revenue in nature. Inasmuch as the assessee itself treated the interest paymen .....

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