Investment allowance, consequent to exchange rate fluctuation is allowable

Tolani Ltd Vs DCIT (Bombay High Court) The Bombay High Court recently addressed a critical tax issue involving M/s. Tolani Ltd. regarding the eligibility for investment allowance based on exchange rate fluctuations. The case revolved around whether the increase in loan liability due to foreign exchange rate fluctuations could be considered as part of the actual cost of acquiring M/s. M.V. Prabhu Das. M/s. Tolani Ltd., engaged in shipping, had claimed investment allowance under Section 32A of the Income Tax Act. The contention was that the fluctuation-related costs should be factored into the a...