Gupta, J.M.—In this appeal, the assessee, M/s. Oil & Natural Gas Corporation Ltd., Dehradun (ONGC) had taken the following grounds of appeal :—

"1. In the circumstances of the case, the Ld. Commissioner of Income-tax (Appeals) has erred in fact and in law and in confirming the order of the Assessing Officer on the point of foreign exchange loss suffered on foreign loans attributable to Revenue Account.

2. The appellant craves to take any other ground of appeal before or at the time of hearing."

1.2 At the instance of the assessee, a Special Bench was constituted to consider the following questions :—

"Whether on the facts and circumstances of the case and in law, the additional liability arising on account of fluctuations in the rate of exchange in respect of loans taken for revenue purposes could be allowed as deduction in the year of fluctuations in the rate of exchange or the same could only be allowed in the year of repayment of such loans."

1.3 M/s. Maruti Udyog Ltd., whose appeals involving the above issues are pending before the Tribunal, were allowed to join as an Intervener.

2. We would firstly refer the facts of the case. To be stated succinctly the assessee i.e. ONGC, whi