Delhi High Court
Cit vs Frick India Ltd. on 17 July, 2001
Equivalent citations: 2001 119 TAXMAN 371 Delhi
Author: A Pasayat
JUDGMENT
Arijit Pasayat, C.J.
Heard.
At the instance of revenue, following question has been referred for opinion of this court by the Tribunal, Delhi Bench 'E', under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessed was entitled to development rebate on increase in the cost of asset as a result of devaluation of rupee ?"
Dispute relates to the assessment year 1967-68.
2. Factual position in nutshell is as follows :
2. Factual position in nutshell is as follows :
The assessed, a private limited company, was originally assessed by order dated 29-3-1972 in which, development rebate was allowed. Subsequently, notice was given to the assessed intimating that it was not entitled to development rebate on the enhanced value due to devaluation. The assessed objected to the action for rectification. Notwithstanding the objection, the assessing officer passed an order denying the benefit of development rebate. Matter was carried in appeal before the Commissioner (Appeals), who held that the withdrawal of development rebate was not proper. Matter was carried in appeal before the Tribunal. It was observed by the Tribunal that the withdrawal was not proper and, therefore, the Commissioner (Appeals)'s order was not to be interfered with. On being moved for reference, question as set out above, has been referred for opinion of this court.
3. We have heard the learned counsel for the revenue. There is no appearance on behalf of assessed in spite of notice. The learned counsel for the revenue submitted that in view of decision of the Apex Court in CIT v. Arvind Mills Ltd. (1992) 193 ITR 255, the assessed was not entitled to development rebate and in view of the conclusions of the Apex Court, the action for rectification does not suffer from any infirmity.
3. We have heard the learned counsel for the revenue. There is no appearance on behalf of assessed in spite of notice. The learned counsel for the revenue submitted that in view of decision of the Apex Court in CIT v. Arvind Mills Ltd. (1992) 193 ITR 255, the assessed was not entitled to development rebate and in view of the conclusions of the Apex Court, the action for rectification does not suffer from any infirmity.
4. As has been rightly submitted by the learned counsel for the revenue, the language of section 43A of the Act is clear. There is a clear requirement of the statute that for the purpose of development rebate any increase or decrease in the actual cost consequent upon fluctuation in exchange rate should not be taken into account. That being the position, the Tribunal was not right in holding that the assessed was entitled to development rebate on the increase in the cost of asset as a result of devaluation of rupee. As the matter is concluded by a decision of the Apex Court, the rectification done was in order. The question, therefore, has to be answered in the negative, in favor of the revenue and against the assessed.
4. As has been rightly submitted by the learned counsel for the revenue, the language of section 43A of the Act is clear. There is a clear requirement of the statute that for the purpose of development rebate any increase or decrease in the actual cost consequent upon fluctuation in exchange rate should not be taken into account. That being the position, the Tribunal was not right in holding that the assessed was entitled to development rebate on the increase in the cost of asset as a result of devaluation of rupee. As the matter is concluded by a decision of the Apex Court, the rectification done was in order. The question, therefore, has to be answered in the negative, in favor of the revenue and against the assessed.
The reference stands disposed of.
