1987 (2) TMI 7

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....om abroad is allowable in computing the assessee's income ? (ii) Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of surtax payable under the Companies (Profits) Surtax Act as business expenditure under section 37 of the Income-tax Act or alternatively as expenditure incidental to carrying on of business deductible under section 28 of the Act while computing income under the head 'Business' ? The assessee, during the previous year relevant to the assessment year 1973-74, incurred a sum of Rs. 10,485 towards the liability to repay the loan taken from the National and Grindlays Bank Ltd. in foreign exchange for the purpose of purchasing machinery from abroad. This amount represents the va....

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....ere an assessee has acquired any asset from a country outside India for the purposes of his business ... in consequence of a change in the rate of exchange at any time after the acquisition of such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency for making payment towards the whole or a part of the cost of the asset or for repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset ... the amount by which the liability aforesaid is so increased or reduced during the previous year shall be added to, or, as the case may be, deducted from, the actual cost of the asset ....