Assessee entitled to investment allowance on account of additional expenditure qua cost of plant and machinery on account of realignment of currency

SUPREME COURT OF INDIA

Civil Appeal Nos. 5153 -5154, 5251 & 5270 of 2005,
8238 of 2009, 6260 & 6261 of 2013

Commissioner of Income-tax - I, Vadodara.............................................................Appellant.
v.
Gujarat State Fertilizer Co. Ltd. .............................................................................Respondent

H.L. DATTU AND MADAN B. LOKUR, JJ.

Date : AUGUST 1, 2013

Appearances

R.P. Bhatt, Arijit Prasad, Ms. Anil Katiyar, Ms. Priya Hingorani and B.V. Balaram Das for the Appellant.
Satyan Seth, Arta Trana Panda, Ms. Geetanjali Mohan, D.N. Ray, Lokesh K. Choudhary, Mrs. Sumita Ray and Ms. Meera Mathur for the Respondent.

Section 32A of the Income Tax Act, 1961 — Investment Allowance — Assessee entitled to investment allowance on account of additional expenditure qua cost of plant and machinery on account of realignment of currency.

FACTS

Tribunal allowed the claim of assessee that assessee was entitled to investment allowance on account of additional expenditure in cost of the plant & machinery on account of realignment of currency (fluctuations in the currency rate). Being aggrieved, Revenue went on appeal before High Court. High Court allowed the deduction. Being aggrieved, Revenue went on appeal before Supreme Court.

HELD

That decision of Gujarat Siddhi Cement Ltd.[2008] 307 ITR 393/174 taxman 598 was followed because this case was identical with the issue raised in this appeal. Question of law raised and canvassed by the revenue against the revenue and in favour of assessee. In the result, appeal was answered in favour of assessee.

ORDER

CIVIL APPEAL NO. 5251 OF 2005

1. This appeal is directed against the judgment and order passed by the High Court of Gujarat at Ahmedabad in Income Tax Reference No. 178 of 1985 dated 15.01.2003.

2. The substantial question of law, raised in this appeal for our consideration and decision is as under:

"Whether the Tribunal has been right in law and on facts in holding that the assessee is entitled to investment allowance on account of the additional expenditure in the cost of plant and machinery on account of realignment of currency (fluctuations in the currency rate)?"

3. In view of the decision of this Court in the case of CIT v. Gujarat Siddhi Cement Ltd. [2008] 307 ITR 393/174 Taxman 598, in our view, the aforesaid question of law is no more a debatable issue.

4. Since the issues raised and considered by this Court in the above referred case is identical with the issues raised in this Civil Appeal, we answer the question of law raised and canvassed by the Revenue against the Revenue and in favour of the assessee.

5. Accordingly, the Civil Appeal is disposed of.

Ordered accordingly.

ORDER

1. Leave granted in S.L.P.(C) Nos. 23798 of 2005 and 4587 of 2009.

2. The civil appeals are disposed of in terms of the signed order.

[2013] 217 TAXMAN 394 (SC)

Assessee entitled to investment allowance on account of additional expenditure qua cost of plant and machinery on account of realignment of currency

SUPREME COURT OF INDIA

Civil Appeal Nos. 5153 -5154, 5251 & 5270 of 2005,
8238 of 2009, 6260 & 6261 of 2013

H.L. DATTU AND MADAN B. LOKUR, JJ.

Date : AUGUST 1, 2013

Appearances

Section 32A of the Income Tax Act, 1961 — Investment Allowance — Assessee entitled to investment allowance on account of additional expenditure qua cost of plant and machinery on account of realignment of currency.

FACTS

HELD

ORDER

CIVIL APPEAL NO. 5251 OF 2005

1. This appeal is directed against the judgment and order passed by the High Court of Gujarat at Ahmedabad in Income Tax Reference No. 178 of 1985 dated 15.01.2003.

2. The substantial question of law, raised in this appeal for our consideration and decision is as under:

3. In view of the decision of this Court in the case of CIT v. Gujarat Siddhi Cement Ltd. [2008] 307 ITR 393/174 Taxman 598, in our view, the aforesaid question of law is no more a debatable issue.

5. Accordingly, the Civil Appeal is disposed of.

Ordered accordingly.

ORDER

1. Leave granted in S.L.P.(C) Nos. 23798 of 2005 and 4587 of 2009.

2. The civil appeals are disposed of in terms of the signed order.

[2013] 217 TAXMAN 394 (SC)