COMMISSIONER OF INCOME TAX Vs. ZUARI INDUSTRIES LTD

JUDGEMENT

(1.) On 23rd June 2008, this Appeal was Admitted on the following substantial questions of law:

(2.) Brief facts necessary for the disposal of the Appeal may be stated thus:

(3.) Feeling aggrieved, the assessee filed an Appeal before the CIT (Appeals). The CIT (Appeals) by an order dated 14th January 2003, confirmed the order of the AO on the issue of payment made to Texmaco as capital expenditure. However, the CIT(Appeals) allowed the expenditure incurred on the foreign travel as business expense and the interest on borrowings for setting up of Argon Gas Plant as revenue expenditure. The assessee carried the matter in Appeal before the Income Tax Appellate Tribunal (ITAT), insofar as the treatment of the payment made to Texmaco in Appeal No. 27/PNJ/2003 is concerned. The Revenue challenged the order in Appeal No. 38/PNJ/2003 against the issue of expenditure on foreign travel and interest on borrowings.