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TMI Blog1983 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of capital nature ? 2. If answer to question No. 1 is in the affirmative, whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the assessee-company was not entitled to depreciation in respect of the said amount of Rs. 4 lakhs ? " At the instance of the Revenue : " Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding the deletion of Rs. 1,49,098 representing the profit on devaluation of pound sterling from the taxable income of the assessee-company for the assessment year 1969-70 ? The assessee is a public limited company doing business in the manufacture of turbines and other machinery for sugar mills. It entered into two agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this amount. In the next three years, it wrote off amounts of Rs. 50,000, Rs. 50,000 and Rs. 90,390, respectively. The assessee claimed these amounts as deductions while determining its profits on the ground that they were expenditure of revenue nature. The income-tax authorities, however, disallowed those deductions on the ground that they were clearly of capital nature resulting in a benefit of lasting nature to the company. Those decisions of the Revenue were upheld by two different Benches of the Tribunal. For the four assessment years, namely, assessment years 1965-66 to 1968-69, two identical questions, besides other questions, were referred to this court for its opinion. By order dated April 5, 1965, in Triveni Engineering Works Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Department. The order of rectification dated November 25, 1974, however, clarifies the factual position. Under the original order of the Tribunal dated May 28, 1974, it was noticed that under the collaboration agreement entered into between the assessee and its foreign collaborators (reference to which has been made earlier), one of the collaborators agreed to lend to the assessee a sum of pounds 50,000 free of interest for a period of 10 years to be repaid in equal annual instalments. The rectification order has substituted the aforesaid sentence by " A loan of pounds 50,000 was received by the assessee from M/s. Bookers Brothers McConnell Co. convertible into equity shares as will be clear from the chart filed before us". The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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