TMI Blog1979 (1) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case are as follows: The assessee is M/s. Kirloskar Asea Ltd., a public limited company registered under the Indian Companies Act and carrying on business at Bangalore. The assessment year is 1971-72, the relevant previous year being the year ending 30th September, 1970. The assessee had entered into a collaboration agreement dated August 21, 1964, with Alimanna Svenska Elektriska Aktiebolaget, hereinafter referred to as " ASEA ". The said foreign collaborator contributed towards the share capital of the assessee-company a sum of Rs. 12,00,000 against which it was allotted 12,000 shares of the assessee-company. This sum was paid in foreign exchange, i.e., dollars, and in terms of dollars, it came to $2,52,026. This sum was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case. We cannot subscribe to the above view put forward by the assessee. The expression " foreign exchange " is defined in the Foreign Exchange Regulation Act, 1947, by s. 2(d) thereof, as foreign currency and includes all deposits, credits and balances payable in any foreign currency, and any drafts, traveller's cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency. Indian currency is defined by s. 2(g) thereof as currency which is expressed or drawn in Indian rupees but does not include special bank notes and special one rupee notes issued under s. 28A of the Reserve Bank of India Act, 1934. For all intents and purposes, foreign currency is in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared by sterling, namely, that their value from day to day varies in terms of sterling, just in the same way as coal, or bricks, or anything else may do. The appellant-company having provided themselves with this particular commodity, which they proposed to exchange for leaf tobacco, their contemplated transactions became impossible of performance, or were not in fact performed. They then realised the commodity which had become surplus to their requirements. When I say 'surplus to their requirements', I mean surplus to their requirements for the purpose and the only purpose for which the dollars were acquired. " The expression " capital asset " for the purpose of s. 45 of the Act is defined in s. 2(14) of the Act and the relevant part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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