2003 (11) TMI 18

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....ort "the Act"), is directed against the order dated January 2, 2003, passed by the Income-tax Appellate Tribunal, Delhi Bench "F", New Delhi (for short, "the Tribunal"), in I.T.A. No. 3105/Delhi of 2002 in respect of the assessment year 1996-97. According to the Revenue, the order involves the following substantial questions of law: (a) Whether, on the facts and circumstances of the case, the lea....

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....s 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. We find from the impugned order that while accepting the view point of the assessee that in view of section 43A of the Act, it is entitled to make such adjustments to arrive at the written down value of the asset on the basis of the foreign exchange rate as on....

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.... appeal has not yet been considered by this court. We do not agree. Section 43A of the Act specifically provides that the amount of increase or decrease in the liability due to fluctuation in exchange rate should be adjusted against the actual cost of the capital expenditure or the cost of acquisition of the capital asset. The section opens with a non obstante clause and, therefore, it overrides ....

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....n the liability is to be taken into account to modify the figure of actual cost, and (ii) that such adjustment should be made in the year in which the increase or decrease in liability arises on account of fluctuations in the rate of exchange. It has been clearly held by the apex court that even in a case where the assessee has completely paid for the plant and machinery in foreign currency prior ....