- (1.) Leave granted.
(2.) Challenge in this appeal is to the judgment of a Division Bench of the Gujarat High Court dismissing the appeal filed by the present appellant. The appeal was filed under Section 260A of the Income Tax Act, 1961 (in short the 'Act'). The question relates to the effect of Section 43A of the Act. The effect of fluctuation of foreign exchange rate resulting in increase of cost of plant and machinery was the dispute.
(3.) Respondent (hereinafter referred to as the 'assessee') claimed increased amount as deduction as investment allowance on account of increase in the cost of plant and machinery on account of exchange rate fluctuation. The assessing officer disallowed the claim on the ground that plant and machinery in respect of which there has been increase were installed in the earlier years. Therefore, there is no scope for provision for investment allowance in the year under assessment. It referred to the letter of the assessee dated IT/JAM/95-96/1226 dated 16.2.1996 making such claim. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) (in short 'CIT(A)'). The disallowance made by the assessing officer was upheld by the CIT(A) on the ground that no arguments were advanced and no factual details were furnished regarding the alleged fluctuation on account of foreign exchange rate. The matter was carried in further appeal by the assessee before the Income Tax Appellate Tribunal, Rajkot (In short 'Tribunal') which allowed the claim placing reliance on a decision of the Gujarat High Court in Commissioner of Income Tax v. Gujarat Fertilizers (2003 (259) ITR 526). Revenue preferred an appeal under Section 260A of the Act before the High Court. By the impugned judgment the High Court upheld the view of the Tribunal referring to the judgment of Gujarat Fertilizers's case (supra).;