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Kirloskar Asea Ltd. Vs. Commissioner of Income-tax, Karnataka - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberIncome-tax Referred Case Nos. 106 and 107 of 1975
Judge
Reported in[1979]117ITR717(KAR); [1979]117ITR717(Karn)
ActsIncome Tax Act, 1961 - Sections 32 and 33
AppellantKirloskar Asea Ltd.
RespondentCommissioner of Income-tax, Karnataka
Appellant AdvocateG. Sarangan, Adv.
Respondent AdvocateS.R. Rajasekharamurthy, Adv.
Excerpt:
.....plaintiff judgment and decree appealed against held, substantial question of law should be with reference to the legal position as emerges from the judgments and decrees of courts below for admitting an appeal under section100 c.p.c., the question of law which is vague, general in nature and not with reference to the particular case cannot be considered as substantial question of law. on facts, held, the question of law as framed at the time of admission does not necessarily indicate as to what aspect of legal position has been erroneously or wrongly decided by the lower appellate court and in what manner. further, the right, title and interest over the entire extent of land as pleaded by the plaintiff itself is doubtful and not a thing which is proved. the suit for recovery of..........sweden. in its books of account, the cost of the machinery was shown in terms of indian rupees at post-devaluation rates. the assessee claimed before the ito in the two years of assessment in question that depreciation allowance and development rebate under ss. 32 and 33 of the i.t. act, 1961, should be allowed on the basis of the cost of the machinery worked out in accordance with the post-devaluation rates. the ito disagreed with the assessee and allowed depreciation allowance and development rebate on the basis of the pre-devaluation rate. on appeal, the aac reversed the said finding of the ito and directed him to allow the reliefs prayed for at the post-evaluation rates. in the second appeal filed by the department, the income-tax appellate tribunal, bangalore bench, reversed the.....
Judgment:

Venkataramaiah, J.

1. The assessee in these two cases is Kirloskar Asea Ltd., Bangalore, and the assessment years are 1970-71 and 1971-72. Under a collaboration agreement entered into with a Swedish concern styled as 'ALINANNA SUENSKA ELECTRISKA AKTIEBOLAGIE' (ASEA), the said concern subscribed Pounds 2,52,000.26 towards the assessee's share capital and that amount was deposited in the assessee's name in a bank in Sweden. That was long prior to June 6, 1966, on which date the Indian rupee was devalued. Subsequently, the assessee purchased some machinery in Sweden and paid out of the amount in deposit in the bank in Sweden. In its books of account, the cost of the machinery was shown in terms of Indian rupees at post-devaluation rates. The assessee claimed before the ITO in the two years of assessment in question that depreciation allowance and development rebate under ss. 32 and 33 of the I.T. Act, 1961, should be allowed on the basis of the cost of the machinery worked out in accordance with the post-devaluation rates. The ITO disagreed with the assessee and allowed depreciation allowance and development rebate on the basis of the pre-devaluation rate. On appeal, the AAC reversed the said finding of the ITO and directed him to allow the reliefs prayed for at the post-evaluation rates. In the second appeal filed by the department, the Income-tax Appellate Tribunal, Bangalore Bench, reversed the decision of the AAC and restored the decision of the ITO on the above question. At the instance of the assessee, the following question has been referred to us in each of the above cases under s. 256(1) of the I.T. Act, 1961:

'Whether, on the facts and in the circumstances of the case, the difference in the rupee value of the machinery calculated with reference to the devaluation of the rupee was part of the actual cost of the plant and machinery for the purposes of allowance of depreciation and development rebate ?'

2. In Kirloskar Electric Company Ltd. v. CIT (I.T.R.C. Nos. 65 to 68 of 1975 decided on August 3, 1978) [Since reported in : [1978]115ITR907(KAR) ], where in similar circumstances a similar question had been referred to us, we have answered it in the affirmative and in favour of the assessee. Following the said decision and for the reasons mentioned in those cases, we answer the question referred to us in the affirmative and in favour of the assessee. No costs.


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