Judgment ( 1. ) THIS is an appeal filed by the assessee under Section 260a of the IT Act against an order dt. 17th Dec. , 1999 passed by Income-tax Appellate Tribunal (for short called Tribunal) in ITA No. 569/ind/1995. This appeal was admitted for final hearing on 19th July, 2000 by framing following substantial question of law : That the disallowance of 1/4 of the capitalised amount of Rs. 4,53,128 by the AO on the ground that expenses such as stationery, printing, books and periodicals, general expenses, miscellaneous expenses, advertisement expenses, application fee, etc. could not be capitalised, is erroneous on the face of the order because these expenses have, in fact, not been capitalised under this head. In fact, these expenses have already been claimed under the deferred revenue expenditure account of Rs, 58,875. 27 which has been separately allowed. Similarly the CIT (A) and the Tribunal committed the same mistake by directing disallowance of 25 per cent, Thus, the impugned orders being contrary to the facts on record, are perverse and are unsustainable in law. Sd/- Sd/ (R. D. Vyas, J.) (Shambhoo Singh, J.) ( 2. ) HEARD Mr. S. C. Bagadia, learned senior advocate with Mr. D. K. Chhabra, learned advocate, for petitioner and Mr. R. L. Jain, learned senior advocate with Ku. V. Mandlik, learned Counsel, for respondent. ( 3. ) AT the outset, we may mention that aforementioned question of law though framed by this Court while admitting this appeal requires amendment, so as to properly appreciate the real controversy sought to be urged by the appellant in this appeal. Since the question framed does not exhibit whether any legal controversy is involved or/and if so, whether it really arises out of the order impugned, we heard the learned Counsel for the parties at length, perused the order passed by AO, CIT (A) and Tribunal, with a view to understand the real controversy. We feel that it would be proper to reframe the aforementioned questions, so that the points sought to be raised by the appellant becomes clear to parties and will enable us to dispose of the appeal on merits in terms of Section 260a ibid. 1. Whether Tribunal was justified in holding that a sum of Rs. 1 lakh should be taxed under Section 35ab, it being an expenditure incurred by the assessee for acquiring technical knowledge ? 2. 1. Whether Tribunal was justified in holding that a sum of Rs. 1 lakh should be taxed under Section 35ab, it being an expenditure incurred by the assessee for acquiring technical knowledge ? 2. Whether Tribunal was justified in holding that 25 per cent of Rs. 4,53,128 was rightly disallowed by AO because the same was not utilised for bringing into existence the plant/machinery ? 3. Whether there was any material to hold that entire amount of Rs. 4,53,128 sought to be capitalised by assessee, was used for bringing into existence the plant ? ( 4. ) WHAT is the true nature of various expenditures claimed by assessee, as specified therein and whether they could be capitalised or could be claimed as deferred revenue expenditure and whether, as a fact, assessee has claimed it and if so, under what head ? 4. The assessee is a private limited company. The assessee is engaged in the business of trading some kind of fabric and manufacture of ice-cream. The asst. yr, 1990-91, i. e. , the year in question, is the first assessment year after commencement of business. ( 5. ) IT is in this assessment year, the question arose before AO in respect of one amount/entry for Rs. 5,93,128. As is clear from the order of AO (Annex. 6) he called for the detail, i. e. , break up of this amount of expenditure from assessee, with a view to ascertain the nature of expenditure. It was supplied by assessee [annex. 7 (1)]. ( 6. ) IT was noticed that the entire sum of Rs. 5,93,128 was capitalised by assessee, treating the same to be in the form of capital expenditure spent in construction of plant/machinery, i. e. , prior to commencement of business. On details being sought, the AO found that a sum of Rs. 1 lakh was spent by way of expenditure in acquiring know-how. In this view, the AO taxed a sum of Rs. 1 lakh under Section 35ab in the manner provided in the said section, i. e. , deduction of Rs. 1 lakh was allowed in six equal instalment in terms of Section 35ab. So far as balance amount of Rs. 1 lakh was spent by way of expenditure in acquiring know-how. In this view, the AO taxed a sum of Rs. 1 lakh under Section 35ab in the manner provided in the said section, i. e. , deduction of Rs. 1 lakh was allowed in six equal instalment in terms of Section 35ab. So far as balance amount of Rs. 4,93,128 was concerned, the AO was of the view that since assessee has not furnished full details of expenses and hence it was not possible to work out exact amount for capitalisation, the AO, therefore, applied his discretion by means of best judgment. He held that 25 per cent of the expenditure out of total of Rs. 4,93,128 are not allowable or can be taken as expenditure towards capitalisation whereas only 75 per cent be held as an allowable one as capitalisation expenditure towards bringing into existence the asset. In this view, the assessee was granted benefit to the extent of 75 per cent of Rs. 4,93,128 under the capitalisation expenditure whereas remaining 25 per cent was refused. ( 7. ) THEN came an explanation of one entry for Rs. 58,875. The assessee had claimed this entry as deferred revenue expenditure. In the opinion of AO, this amount was part of the main entry of Rs. 5,93,128 and since assessee had not submitted any details to the satisfaction of AO, the assessee was held entitled to the extent of benefit of Rs. 40,000 in place of Rs. 58,875. 27. In other words, the AO instead of allowing the deduction of entire amount of Rs. 58,875. 27 towards deferred revenue expenditure, confined it to Rs. 40,000. In this view, partial benefit was allowed. This is how the benefit of Rs. 5,93,128 was worked out by AO. ( 8. ) THE CIT (A) and Tribunal in the appeals filed upheld the manner in which the AO dealt with the deduction in its entirety and dismissed the appeal filed by the assessee. It is against this order, or one may say, determination of Rs. 5,93,128, the assessee has felt aggrieved and filed this appeal. Since this Court entertained the appeal on the question framed, we heard the matter in its entirety keeping in view the controversy originated from the order of AO referred supra and reframed the questions so that one is able to know the issues involved. ( 9. 5,93,128, the assessee has felt aggrieved and filed this appeal. Since this Court entertained the appeal on the question framed, we heard the matter in its entirety keeping in view the controversy originated from the order of AO referred supra and reframed the questions so that one is able to know the issues involved. ( 9. ) HAVING heard the learned Counsel for the parties and having perused the record of the case, we find absolutely no merit in the appeal. In other words, even after refraining the questions, we are of the view that none of these questions really arise for consideration and even if they are held to arise because the appeal was admitted for final hearing, the same in our humble opinion, deserve to be answered against an assessee. ( 10. ) IT is a settled position of law that when the Act provides a specific section for determination of one kind of expenditure in a particular manner, as provided in that section, then, that particular expenditure has to be determined only in the manner prescribed in that section and not by any other mode. This principle applies in the facts of this case so far as deduction dealing with the expenditure of Rs. 1 lakh incurred by the assessee for acquiring know-how, is concerned. Section 35ab of the Act in clear terms provides as to how and in what manner the expenditure incurred by an assessee for acquiring know-how is to be allowed as deduction. It is in this section, the AO allowed the deduction in relation to Rs. 1 lakh out of Rs. 5,93,128. We cannot find any fault in the approach of AO so far as this expenditure of Rs. 1 lakh is concerned. In our opinion, it was rightly upheld by CIT (A) and Tribunal. We too upheld it calling for no interference. ( 11. ) COMING to claiming of capitalising expenditure of Rs. 4,93,128, in our opinion, the principle of accountancy does permit such capitalisation of certain kind of expenditure to be claimed by way of deduction by the assessee which is incurred by them (assessee) prior to commencement of business. However, such capitalisation cannot be claimed in respect of every type of expenditure but it can only be allowed in respect of those expenditures which are incurred for bringing into existence the asset of enduring nature, i. e. , plant, etc. However, such capitalisation cannot be claimed in respect of every type of expenditure but it can only be allowed in respect of those expenditures which are incurred for bringing into existence the asset of enduring nature, i. e. , plant, etc. ( 12. ) COMING to the facts of this case, though assessee claimed to have incurred a sum of Rs. 4,93,128 under this head and capitalised it for claiming its benefit, the AO as observed supra did not grant the benefit for the whole amount but confined it to 75 per cent of the total amount thereby denying it to the extent of 25 per cent. This he did in his sole discretion because he found that no adequate material was tendered by assessee to prove the actual expenditure and its nature. In other words, the AO held that capitalisation of 75 per cent of Rs. 4,29,128 alone is well justified and not that of whole one. ( 13. ) IN our opinion, no fault can be found in the approach of taxing authorities including Tribunal when they declined to grant the benefit to the extent of 25 per cent under the capitalisation head to assessee. Firstly, it does not involve any question of law, much less substantial question of law. Secondly, in the absence of any adequate material, the AO had the discretion to grant benefit to the extent of 75 per cent and declining to the extent of 25 per cent. Thirdly, it was not the case of assessee that despite adequate material, the AO wrongly declined benefit to the extent of 25 per cent. Fourthly, it was also not the case of assessee that AO did not examine the case of assessee on this issue at all and, yet, declined to grant benefit and lastly, the exercise of discretion by AO on this issue which is based on examination of entire material in support of capitalisation of expenditure cannot be said to be either arbitrary or illegal; it was rightly upheld by CIT (A) and Tribunal, calling for no interference by this Court in an appeal filed by assessee under Section 260a ibid. ( 14. ) THEN we come to an entry of Rs. 58,875. As observed supra, the AO granted benefit to the extent of Rs. 40,000 only as deferred revenue expenditure as against what was claimed for Rs. 58,875. ( 14. ) THEN we come to an entry of Rs. 58,875. As observed supra, the AO granted benefit to the extent of Rs. 40,000 only as deferred revenue expenditure as against what was claimed for Rs. 58,875. This was upheld by CIT (A) and Tribunal. We find no fault in this approach of AO, CIT (A) and Tribunal. Firstly, this also does not involve any question of law much less substantial question of law. Secondly, in the absence of any adequate material, if AO has in his discretion declined to confine the deduction to the extent of Rs. 40,000 in place of Rs. 58,875, then it is not liable to be interfered with. Thirdly, the reasoning that this Court has applied for upholding the entry of Rs. 4,93,128, the same applied to this entry as well. ( 15. ) SUBMISSION of learned Counsel for the assessee was that the expenditure incurred for certain items such as stationery, printing, books, periodicals, general were not capitalised and, hence, finding on that issue need to be set aside and the case be remanded for fresh look on this issue. We find no merit in this submission. Firstly, it is a pure question of fact involving no substantial question of law of any nature, so as to take note of in this appeal. Secondly, what is sought to be contended does not appear to be so when one peruses the order of AO. Thirdly, the issue in regard to this expenditure whether taken as deferred revenue expenditure or capitalised expenditure, was expressly gone into by AO in his order and accordingly benefit to the extent of Rs. 40,000 as deferred revenue expenditure and 75 per cent as capitalised expenditure, was extended. This was then upheld upto Tribunal. In this view, the challenge on this issue really does not survive, as being entirely confusing or misconceived in nature. ( 16. ) TO conclude, we may say that we went into all the questions raised in this appeal under several heads without any reservation as to whether they can be gone into in appeal under Section 260a of the Act or not. It was for the reason that the appeal was admitted for final hearing on such question of law which did not make us clear as to on which issue we can hear this appeal. It was for the reason that the appeal was admitted for final hearing on such question of law which did not make us clear as to on which issue we can hear this appeal. We, therefore, considered in the interest of justice that we should examine each and every issue raised by assessee before AO and record our finding. As observed supra, all the issues raised by assessee which were mostly centred around to an entry of Rs. 5,93,128 had no merit. ( 17. ) AS a consequence, the appeal is found to be devoid of any merit. It is dismissed. No cost.