S.N. Jha, J.

At the instance of the assessee the Tribunal has referred the following questions to this Court for opinion under Section 256(2) of the Income-tax Act, 1961:

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in not allowing investment allowance u/s 32A of the I.T. Act, 1961 on the sum of Rs.25,00,493/- representing the increase in the actual cost of changes in the rates of exchange under S. 43A of the Act ?

2. Whether on the facts and in the circumstances of the case, the Tribunal was right in applying the ratio of the decision of the Hon'ble Supreme Court in the case of CIT vs. Arvind Mills Ltd. (193 ITR 255) rendered in connection with the allowance of Development rebate to the Company's claim for allowing Investment allowance?

2. The assessee-Company is engaged in the business of manufacturing telephone cables. It acquired plant and machinery from outside India in connection with its business. The plant and machinery were installed and put to use from 1.10.1988 when the company commenced its commercial production. For the assessment year 1989-90 corresponding to accounting' year 1988-89 ending on 31st March, 1989 the as