- (1.) Although several questions of law were raised before the High court, we are here concerned only with the following two questions: "(2 Whether on the facts and in the circumstances of the case, and having regard to the fact that the net gain of Rs 48,984. 00 was made by the assessee-company from fluctuations in the rate of foreign exchange while repaying the instalments of the foreign loan for the Assessment Year 1960-61, the appropriate part of the said gain (i. e. after excluding that portion of it which is attributable to the element of interest) was gain on capital account which went to reduce the 'actual cost' of the depreciable assets for computing depreciation for the Assessment Year 1960-1961 (3 Whether on the facts and in the circumstances of the case and having regard to the fact that the net loss of Rs 29,063. 00 and net loss of Rs 58,28,839. 00 accrued to the assessee-company from the fluctuations in the rate of foreign exchange for the Assessment Year 1961-62, the appropriate part of each of the said two amounts (i. e. after excluding that portion of it which is attributable to the element of interest) was loss on capital account which went to increase the 'actual cost' of the depreciable assets for computing depreciation for the Assessment Year 1961-62 -
(2.) The High court has followed its earlier decisions in the case of commissioner OF INCOME TAX v. Tata Hydro Electric Power Supply Co. Ltd. A point has been taken onbehalf of the respondents that the Department not having come up in appeal against that decision, must be taken to have accepted the law stated in that decision as correct. Therefore, it should not be allowed to agitate these questions in this court.
(3.) Mr. Murthy, learned Senior Counsel appearing on behalf of the department, has pointed out that we are concerned in this case with assessment for the Assessment Years 1960-61 and 1961-62. The relevant assessment years in the judgment relied upon by the High court were 1970- 71 and 1971-72. The High court in those cases relied on the provisions of section 43-A of the Income Tax Act which came into force on 1/4/1967. In the instant case, there is no scope for application of Section 43-A. Therefore, the decision rendered in the case relied upon by the High court cannot have any bearing to the controversy now raised. We are of the view that Mr. Murthy is right in his contention on this aspect of the matter.;