S. Ravindra Bhat, J.

1. The present appeal is directed against an order of the Income Tax Appellate Tribunal (“ITAT”) dated 09.01.2012, and involves decisions on the following question of law framed at the time of admission:

“Did the Tribunal fall into error of law in holding that the appellant’s claim that the amount has been spent during the Assessment Year 2006-07, for the higher education of Sh. Dushyant Poddar, a son of its Director, was not liable as “business expenditure” under Section 37 of the Income Tax Act?”

2. For the year under consideration, the appellant company (hereinafter referred to as assessee) filed its return declaring loss at Rs.2,08,72,440/- under the normal provisions and book profit at Rs.1,35,42,270/- under Section 115JB of the Income Tax Act, 1961 (“the Act”), on 24.11.2006. In the Profit and Loss Account annexed to the return of income, assessee had claimed a sum of Rs.23,16,942/- as expenses incurred under the head “Education & Training Expenses”. These expenses had been incurred by the assessee on higher education of Shri Dushyant Poddar, an employee of the company, who happens to be the son of the Directors Shri Lalit Poddar and Smt Saroj Podd