IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 31ST MARCH 2008 / 11TH CHAITHRA 1930 ITA.No. 216 of 2002() --------------------- ITA.172/COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ------------------------------------- THE COMMISSIONER OF INCOME TAX, KANNUR. BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: RESPONDENT/RESPONDENT: ----------------------------------- THE KELTRON COMPONENT COMPLEX LTD., KALLIASSERI, KANNUR. BY ADV. SRI.P.BALACHANDRAN SMT.PREETHA S.NAIR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 31/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & T.R. RAMACHANDRAN NAIR, JJ. -------------------------------------------- I.T.A. No. 216 OF 2002 -------------------------------------------- Dated this the 31st day of March, 2008 JUDGMENT C.N.Ramachandran Nair,J. The question raised in the appeal filed by the revenue under Section 260A of the IT Act, against the respondent, which is a Government of Kerala undertaking, is whether the Tribunal was justified in allowing depreciation on the cost of machinery taking into account the increase in cost on account of exchange rate fluctuation. We have heard senior counsel appearing for the revenue and senior counsel Sri. P. Balachandran appearing for the respondent. The claim of depreciation is on imported capital goods. The assessee fixed the cost based on the prevailing exchange rate as provided under Section 43A of the Income Tax Act and claimed depreciation. The Assessing Officer however rejected the claim of additional cost attributable to exchange rate fluctuation on the ground that assessee has not paid the cost at higher rate during the previous year. In fact assessee's first appeal was allowed by the CIT (Appeals) and the same is confirmed by the Tribunal in second appeal. It is against this order of the Tribunal 2 that the department has come up with this appeal. 2. We notice that the Tribunal dismissed the department's appeal and confirmed orders of the two lower authorities following their orders in assessee's own case for the earlier years. This court vide judgment in I.T.A. No.9/2002 and in I.T.A. Nos.165 and 324 of 2002 dismissed the department's appeals filed against the earlier orders of the Tribunal on 1.4.2003. Since the issue is already covered by the above judgments of this court in assessee's own case, we do not find any ground to interfere with the order of the Tribunal passed for this year. Moreover, the Tribunal's order is based on the judgment of the Bombay High Court in CIT V. TATA HYDRO ELECTRIC POWER SUPPLY CO. reported in 159 ITR 29 and also the decision of the Supreme Court in COMMISSIONER OF INCOME-TAX V. ARVIND MILLS LTD. reported in (1992) 193 ITR 255. We do not find any justification to deviate from the view expressed by the Bombay High Court confirmed by this court in I.T.A. No.9/2002 in assessee's own 3 case for the earlier year. We, therefore, dismiss the department's appeal. (C.N.RAMACHANDRAN NAIR) Judge. (T.R.RAMACHANDRAN NAIR) Judge. kk