Law:

Section:

Section 43A, read with sections 32A and 43, of the Income-tax Act, 1961 - Rate of exchange of currency, special provisions consequential to changes in - Assessment years 1977-78 to 1979-80 - Whether assessee, acquiring a specified asset from a country outside India on deferred payment basis or by taking a loan repayable in foreign currency, is entitled to claim investment allowance and same would vary depending on increase/decrease in existing liability of assessee towards cost of acquisition of asset arising from fluctuation in foreign exchange rate, provided such fluctuation takes place within a period of eight years from expiry of previous year in which asset was installed and first put to use - Held, yes - Whether additional investment allowance on account of fluctuation in foreign exchange rate will be computed only in respect of additional liability on principal amount of cost or loan repayment towards cost price, and not in respect of interest component of payment, for which deduction will be available as business expenditure under section 36(1)(iii) - Held, yes - Whether if cost of asset goes up on account of any fluctuation in foreign exchange rate within period of eight years, assessee will be entitled to claim investment allowance on such additional cost paid by it in foreign currency, notwithstanding fact that it had already availed of full investment allowance before date of fluctuation on basis of cost earlier worked out - Held, yes - Whether day-to-day fluctuation in rate of foreign exchange will not have any bearing on liability as such and crucial day is date of payment of instalment under deferred payment scheme or date of repayment of loan or a part thereof obtained for purpose of acquisition of asset - Held, yes - Whether if, on date of repayment of loan or payment of any instalment of purchase price, any additional liability is imposed because of fluctuation in rate of exchange, assessee will be entitled to capitalise such liability - Held, yes - Whether Division Bench in CIT v. Windsor Foods Ltd. [1999] 235 ITR 249/[1998]99 Taxman 355 (Guj.) was right in holding that fluctuation in foreign exchange rate in a subsequent year cannot relate…

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