Appeal dismissed due to lack of legal question. Remand for Section 35D consideration. No interference under Section 260A.

The Court dismissed the appeal as no substantial question of law was involved. The Tribunal's decision was remanded to the Assessing Officer for consideration of capital expenditure under Section 35D of the Income Tax Act. The Court found that the Tribunal did not conclusively determine the applicability of Section 35D, and the open remand allowed the Revenue to raise relevant contentions. The Court emphasized that no interference was warranted under Section 260A of the Income Tax Act, as no substantial question of law arose from the Tribunal's decision.

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Issues:
1. Whether the ITAT was right in directing the Assessing Officer to consider capital expenditure under Section 35D of the Income Tax ActRs.
2. Whether the Tribunal was justified in accepting and acting upon the ground of fluctuation in currency rate without it being raised before the Commissioner of Income Tax (Appeals)Rs.
3. Whether the ITAT was right in allowing depreciation based on the fluctuation of foreign currency without actual paymentRs.
4. Whether the Tribunal's order regarding the wording of Section 43A and making payment towards the cost of the asset was against the lawRs.

Analysis:
1. The appeal involved questions of law related to the ITAT's direction to consider capital expenditure under Section 35D of the Income Tax Act. The Revenue challenged the ITAT's decision, arguing that the assessee had abandoned the project, making Section 35D inapplicable. The Revenue contended that since the assessee did not have a business connection, no benefit could be claimed under Section 35D. The Court noted that the Tribunal did not render a finding on the applicability of Section 35D and remanded the matter to the Assessing Officer. The Court held that no substantial question of law was involved, and the appeal was dismissed.

2. The Tribunal accepted and acted upon the ground of fluctuation in the value of foreign currency, even though it was not raised before the Commissioner of Income Tax (Appeals). The Revenue argued that the Tribunal's decision to allow depreciation based on the fluctuation of foreign currency without actual payment was against the provisions of the Income Tax Act. The Court found that no prejudice was caused by the open remand to the Assessing Officer, allowing the Revenue to raise relevant contentions. As the Tribunal did not provide a finding on the applicability of Section 35D, the Court concluded that no substantial question of law warranted interference.

3. The Revenue contended that the ITAT's decision on depreciation based on the fluctuation of foreign currency without actual payment was contrary to the Income Tax Act. However, the Court emphasized that the Tribunal's decision was an open remand, enabling the Revenue to present all relevant contentions, including any questions of law, to the Assessing Officer. Since the Tribunal did not conclusively determine the applicability of Section 35D, the Court found no substantial question of law justifying intervention under Section 260A of the Income Tax Act.

4. The Tribunal's order regarding the wording of Section 43A and making payment towards the cost of the asset was challenged by the Revenue. However, the Court observed that the issue of Section 43A had been settled in favor of the assessee by a Supreme Court decision. Therefore, the only remaining dispute pertained to Section 35D of the Income Tax Act. The Court dismissed the appeal, emphasizing that no finding on the applicability of Section 35D had been made by the Tribunal, and no substantial question of law necessitated the Court's interference.

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