- (1.) The following three questions at the instance of the assessee really survive for consideration in this appeal, out of the four questions referred to in the judgment of the High Court: (I) Whether on the facts and in the circumstances of the case and having regard to the fact that the assessee is a sterling company maintaining accounts in pound sterling, the Tribunal was right in holding that for the purposes of computation of the admissible amounts of depreciation, loss under Section 32 (1) (iii) and/or development rebate and profit under Section 41 (2) of the Act for Assessment Years 1968-69 and 1969-70, the written-down value of the fixed assets should be determined not in pound sterling but in equivalent amount of rupees (ii) Whether on the facts and in the circumstances of the case a revision of the written-down value of the assets comprising service lines acquired prior to 1-4-1961, which written-down value had been correctly arrived at under the Indian Income Tax Act, 1922 was required for assessment Years 1968-69 and 1969-70, by virtue of the definition of "actual cost" introduced by the Income Tax Act, 1961 with effect from assessment Year 1962-63 (iv) Whether on the facts and circumstances of the case, the Tribunal was right in holding that the Income Tax Officer was justified in withholding the interest of Rs 14,64,130 granted by him in the original assessment for Assessment Year 1968-69 and Rs 12,09,093 for assessment Year 1969-70
(2.) We are not concerned with the third question, referred to in the judgment of the High Court in this appeal by the assessee, as it has been answered by the High Court in favour of the assessee.
(3.) So far as the first question is concerned, we agree with the view expressed by the High Court. Assessment of total income in India will have to be in Indian rupees. The Company may keep its account in foreign currency. But depreciation will have to be calculated in Indian currency at the point of time of acquisition of the asset. The assessee Company maintains its accounts in pound sterling but while making assessment in India, the rupee value of the capital asset has to be taken into account for calculating its actual cost at the time of acquisition of the asset. Subsequent fluctuations in the value of pound sterling is immaterial for this purpose. Hence the first question was rightly answered by the High Court.;