K.S. Puttaswamy, J.—In these consolidated references made under section 256 of the Income Tax Act, 1961 ("the Act"), the Income Tax Appellate Tribunal, Bangalore Bench, Bangalore ("the Tribunal"), at the instance of the Revenue, has referred as many as seven questions of law for the opinion of this court for one and the same assessment year of the assesses. In order to appreciate the questions referred, which will be Noticed and dealt with, it is necessary in the first instance to notice the facts as found by the Tribunal.

2. M/s. Motor Industries Company Limited, Bangalore, a public limited company incorporated under the Companies Act and engaged in the manufacture of automobile ancillaries, is the assesses and the assessment year to which all the questions relate is 1974-75 relevant to the accounting year ending on December 31, 1973.

3. First, on the foreign loans secured for the purchase of machinery, the assesses made certain payments, however, incurring extra liability in Indian currency due to fluctuations in exchange rates. Second, the assesses incurred expenses on the repairs of houses owned but allotted to its executives for their residence. Third, the assesses had