AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, the following two questions have been referred to this court for the assessment year 1973-74 : "1. Whether, on the facts and in the circumstances of the case, the loss arising out of exchange fluctuation in respect of the payment of the instalments of loan in Japanese yen obtained for the purchase of machineries on deferred payment basis was capital or revenue expenditure ?

( 2 ) WHETHER, on the facts and in the circumstances of the case, the assessee can claim as deduction the provision for payment of leave salary in the year under consideration ?" 2. At the suggestion of the learned advocates, we have reframed the first question as follows to bring out the real controversy :"whether, on the facts and in the circumstances of this case, the additional expenditure incurred by reason of exchange fluctuation in respect of the payment of the instalments of loan in Japanese yen obtained for the purchase of machinery on deferred payment basis was capital or revenue expenditure ?"

( 3 ) THE facts relating to the first question are stated herea

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