Decision In The Case Of Cit v. Paper Products

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.391 OF 2009 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.391 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. M/s.Modern Terry Towels Pvt.Ltd. ..Respondent. Mr.Suresh Kumar for appellant. None for respondent. CORAM : V.C.DAGA ANDJ.P.DEVADHAR, JJ. DATED : 29TH APRIL, 2009. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 29TH APRIL, 2009. P.C. :- P.C. :- 1. Heard learned counsel for the revenue. The appeals seeks to raise the following questions of law:- 1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law that depreciation is to be allowed on notional increased cost of assets due to foreign exchange fluctuation as on the last day of the relevant previous year within the meaning of section 43A of the I.T. Act relying upon Delhi High Court’s decision in the case of CIT Vs. Paper Products, 271 ITR 472 even though as per provision of section 43A of the I.T. Act liability is to be determined at the time of payment ? 2) The Tribunal has failed to appreciate that in the case of Arvind Mills Ltd. 193 ITR 255 (S.C.), the Apex Court while explaining the scope of section 43A of the I.T. Act have nowhere laid down that cost of assets may be increased or deceased on notional basis depending upon the exchange rate as on the last day of the relevant - = : 2 : = - previous year. In fact the liability as per provisions of section 43A is to be determined at the time of payment ? 2. Learned counsel for the revenue fairly states that both the above questions are covered by the judgment of the Supreme Court in the case of Commissioner of Income Tax, Delhi V/s. M/s.WoodwardGovernor India P. Ltd. in Civil Appeal No.2206 of Commissioner of Income Tax, Delhi V/s. M/s.Woodward Governor India P. Ltd. 2009 along with other connected matters decided on 8/4/2009 (unreported). In this view of the matter, no substantial question of law arise in this appeal. Appeal is dismissed in limini with no order as to costs. (V.C.DAGA, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.)