JANARTHANAM, J.

In this tax cases the question that falls for consideration is reflected as below:

"Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 43A(2) of the Income-tax Act, 1961.

The assessee is an Indian company dealing in the manufacture and sale of electronic instruments, relays, fusegears, etc. For the assessment year 1967-68, the assessee furnished a return declaring a loss of Rs. 11, 92, 468 and the assessment was, however, completed on a total income of Rs. 29, 06, 220.

The assessee purchased certain machinery from foreign parties in August, 1965, at a cost of Rs. 2, 45, 540 and installed it in his factory during October and November, 1965. The actual payment for this machinery was made only in August, 1966, and in between this was devaluation of Indian currency on June 6, 1966.

As a result of devaluation, the assessee had to pay the increase in value of rupee to the extent of Rs. 1, 41, 185.

The assessee claimed development rebate on the sum of Rs. 1, 41, 185 also on the ground that the actual cost as per section 43(1) of the Income-tax Act, 1961 (for short "the Act"), would include the increased cost in v