TMI Blog2002 (11) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the extent of Rs. 43,834 out of the total disallowance of Rs. 70,135 made on account of expenses on air fare charges of Neville N. Wadla, the Chairman of the Company. At the time of the hearing it was pointed out on behalf of the assessee that an identical issue has been decided by the Tribunal in the assessee s own case for the assessment year 1989-90 in ITA No. 7259/Bom./92 by order dated 5-7-2001, in favour of the assessee and a copy of the said order was filed. Our attention was drawn to paragraphs 7 to 10 of the said order where the issue has been considered at length. A perusal of the assessment order shows that the Assessing Officer has relied on the reasoning given in the assessment order for the assessment year 1989-90 and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med that while working out the investment allowance they had erroneously excluded the exchange rate differences amounting to Rs. 41,32,000 and accordingly claimed investment allowance of Rs. 8,26,400 as investment allowance. This represented 20% of the amount of exchange rate difference paid by the assessee. The claim was supported on the basis of the order of the Madras Bench of the Tribunal in the case of Southern Asbestos Cements Ltd. v. DCIT ( 38 ITD 449 ). A request was also made that the assessee be allowed to create the corresponding reserve in the subsequent years. 5. The Assessing Officer, relying on the judgment of the Hon ble Supreme Court in CIT v. Arvind Mills Ltd. [1992] 193 ITR 255 rejected the assessee s claim. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 33 and there was no bar on such amount being taken into account for ascertaining the actual cost of the asset for the purpose of investment allowance which fell under section 32A. It was also pointed out that though there are observations in the judgment of the Hon ble Supreme Court cited by the Assessing Officer to the effect that development rebate has been replaced by investment allowance, the provisions of sub-section (2) of section 43A have not been suitably amended to make them applicable to the computation of the actual cost of an asset for the purpose of investment allowance also and, therefore, the provisions of sub-section (1) of section 43A should be given full effect to enable the assessee to claim investment allowance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in Arvind Mills ( supra ), One of the arguments before the Supreme Court on behalf of the assessee (Arvind Mills) was that section 43A(1) applies "only where the fluctuation in rate occurs in a previous year subsequent to that in which the asset is acquired" (at page 269 of the report). The Supreme Court found no merit in the argument. In other words, the Supreme Court was not inclined to confine the applicability of sub-section (1) to cases where the fluctuation in rate occurs in a previous year subsequent to the year in which the asset was acquired. By implication, the position, namely, that the sub-section applies also to a case where the fluctuation occurs in a year subsequent to the year in which the asset is acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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