SUPREME COURT OF INDIA

Commissioner of Income-tax, Madras

v

Lucas T. V. S. Ltd.

Section 32A, read with section 43A, of the Income-tax Act, 1961 - Investment allowance -Assessment years 1989-90,1991-92 and 1992-93 - For assessment years in question assessee claimed investment allowance under section 32A - Assessing Officer was of view that it was only to be allowed in one assessment year and not several assessment years - High Court relying upon decision of Madras High Court in Southern Asbestos Cement Ltd. v. CIT [2003] 259 ITR 631, held that in view of section 43A (1), allowance was to be granted in different assessment years - Revenue contended that section 43A(1) relates to fluctuation of foreign exchange and its effect on valuation of assets and since it has nothing to do with question as to whether it is allowable in one year, decision relied upon by High Court had no application and said position was fairly accepted by assessee - Whether, matter was to be remitted back to High Court for fresh adjudication after formulating question of law involved - Held, yes

FACTS

For the assessment years 1989-90, 1991-92 and 1992-93, the assessee claimed investment allowance under section 32A. The Assessing Officer was of the view that it was only to be allowed in one assessment year and not several assessment years. On appeal, the Tribunal held that in view of section 43A(1), the allowance was to be granted in different assessment years. On appeal, the High Court relying upon the decision of Madras High Court in Southern Asbestos Cement Ltd. v. CIT [2003] 259 ITR 631, upheld the order of the Tribunal.

On appeal to the Supreme Court:

HELD

The revenue contended that section 43A(1) relates to fluctuation of foreign exchange and its effect on the valuation of the assets and since it has nothing to do with the question as to whether it is allowable in one year, the decision relied upon by the High Court had no application and said position was fairly accepted by the assessee. [Paras 5 and 6]

In that view of the matter order of the High Court was to be set aside and the matter was to be remitted back to it for fresh adjudication after formulating the question of law involved. [Para 7]