Depreciation on foreign currency fluctuation amounts required reconsideration after relevant Supreme Court observations were overlooked.

Foreign currency fluctuation amounts claimed as depreciation required fresh examination because the appellate authority had rejected the claim on the ground that the cited Supreme Court precedent concerned development rebate, without considering its observations on depreciation allowance. The matter was remitted for reconsideration of the depreciation claim in light of the legal principles emerging from that decision and any other applicable authorities. The appellate authority must re-adjudicate the claim in accordance with law.

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Issues: Whether the appellate authority was required to reconsider the assessee's claim for depreciation on foreign currency fluctuation amounts in light of the principles laid down in the cited Supreme Court decision.

Analysis: The claim for depreciation had been rejected on the view that the cited precedent dealt with development rebate and not depreciation. The order notes that relevant observations in that decision concerning depreciation allowance were not considered. In these circumstances, the matter required fresh examination by the appellate authority with reference to the legal principles emerging from that decision and any other applicable authorities.

Conclusion: The matter was sent back to the Commissioner of Income-tax (Appeals) for reconsideration of the depreciation claim in accordance with law.

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