ENNORE FOUNDARIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THREE questions at the instance of the Revenue and one at the instance of the assessee arising from the order of the Income-tax Appellate Tribunal on the appeals preferred by the assessee, as also, by the Revenue which appeals arose out of the order of the Commissioner in appeal with regard to the assessment made on the assessee for the assessment year 1985-86 are now before us.

(2.) THE first question referred at the instance of the Revenue is, as to whether the assessee was entitled to investment allowance on the incremental cost by reason of foreign exchange fluctuation. That question has already been considered by this court in the case of CIT v. Chengalvarayan Co-operative Sugar Mills Ltd. [2000] 242 ITR 440, wherein, it was held that the liability of the assessee during the previous year on account of the change in the rate of exchange was part of the actual cost of the machinery acquired from a foreign country, and the assessee was entitled to investment allowance on the additional cost. This question is, therefore, answered in favour of the assessee, and against the Revenue.