COMMISSIONER OF INCOME TAX Vs. IFFCO LTD

JUDGEMENT

(1.) THIS appeal, by the Revenue, under Section 260A of the IT Act, 1961 (for short 'the Act') is directed against the order passed by the Income -tax Appellate Tribunal, Delhi Bench 'F', New Delhi (for short 'the Tribunal') in ITA No. 948/Del/1986, in respect of asst. yr. 1991 -92. According to the Revenue, the order involves the following substantial questions of law :

(2.) SINCE , from the format of the questions, it is evident that the issue raised by the Revenue is purely legal, we deem it unnecessary to state the facts. Suffice it to note that the question raised is whether for the purpose of depreciation allowance, the assessed was entitled to make adjustment in the original actual cost of the imported capital assets when there was an increase or decrease in his liability for payment of the cost of the asset on account of fluctuation in the rate of foreign exchange.

(3.) MS . Prem Lata Bansal, learned counsel for the Revenue, has vehemently contended that the Tribunal is not correct in holding that the issue stands concluded by the decision of the Supreme Court in Arvind Mills Ltd's case (supra). According to the learned counsel, Section 43A does not permit of an adjustment on the basis of a notional increase in the liability. The submission is that it is the actual increase or decrease of the liability, which is to be taken into account.