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2021 (11) TMI 540 - HC - Income TaxAdditional Depreciation on increased cost - Adjustments u/s 43A - adjustment towards the actual cost of plant and machinery which might get increased due to the exchange rate fluctuation - HELD THAT:- The actual cost in such cases can be quantified “at the time of actual payment and not on the accrual basis” entirely misses the central issue which is the effect of increase in the cost on account of exchange rate fluctuation. This issue was implicitly acknowledged by the Supreme Court in Arvind Mills Ltd [1991 (12) TMI 1 - SUPREME COURT] where after analyzing Section 43 A of the Act, in the context of development rebate, it was observed that the increase or decrease in liability should be taken into account to modify the figure of actual cost and secondly that such adjustment should be made in the year in which the increase or decrease in liability arises on account of the fluctuation in the rate of exchange. The above conclusion is consistent with the decision of the Calcutta High Court in Kanoria Chemicals and Industries Ltd. [1991 (3) TMI 4 - CALCUTTA HIGH COURT] and in Hindustan Aluminum Corporation Ltd. [1993 (8) TMI 56 - BOMBAY HIGH COURT] There is no decision to the contrary cited before this Court by the Department. The Court answers the question in the affirmative i.e. in favour of the Assessee.
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