Apollo Tyres Ltd. (No. 2) v. ACIT (2019) 416 ITR 539 (Ker.)(HC) CIT v. Apollo Tyres Ltd. (No. 3) (2019) 416 ITR 554 (Ker.)(HC)

S. 43A : Rate of exchange-Foreign currency-Actual cost-Gains earned on cancellation of forward contracts-Capital in nature and liable to be capitalized towards cost of machinery. [S. 43(1)]

Dismissing the appeal of the assessee the Court held that   the Tribunal was correct in holding that the gains that arose from cancellation of forward contracts which were connected with foreign loans raised for the purchase of machinery were capital in nature and were liable to be capitalized towards the cost of the machinery under section 43A(1) read with Explanation 3 thereto. (AY. 1993-94)(AY. 1994-95)