Commissioner of Income Tax vs Tata Hydro Electric Power Supply Co. Ltd.

T.D. Sugla, J.—In this Departmental reference relating to two assessees'' assessment for asst. yr. 1972-73, the Income Tax Appellate Tribunal has referred to this Court the following questions of law opinion under s. 256(1) of the IT Act, 1961 :

R.A. No. 1923(Bom)/75-76 :

"1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the loss of Rs. 1,12,196 arising as a result of fluctuations in the rates of exchange arising in the course of repayment of loans to the World Bank should be allowed as a revenue deduction in the computation of income ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to depreciation on the written down value of the assets based on the increased cost thereof due to revaluation of currency, arrived at after giving effect to various appellate orders for earlier years ?"

R.A. No. 1924(Bom)/75-76 :

"1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the loss of Rs. 2,80,491 arising as a result of fluctuations in the rates of exchange arising in the course of repayment of loans to the World Bank should be allowed as a revenue deduction in the computation of income ?

Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to depreciation on the written down value of the assets based on the increased cost thereof due to revaluation of currency arrived at after giving effect to various appellate orders for earlier years ?"

The counsel are agreed that, in view of the Supreme Court decision in the case of Sutlej Cotton Mills Limited Vs. Commissioner of Income Tax, Calcutta, , the first question in each of the two references is to be answered in the negative and in favour of the Revenue and that in view of our Court''s judgment in the assessee''s own case reported in Commissioner of Income Tax Vs. Tata Hydro Electric Power Supply Co. Ltd., , the second question in each of the two reference is to be answered in the affirmative and in favour of the assessee. The questions are so answered.

No order as to costs.