K. Raviraja Pandian, J.

1. The revenue on appeal against the order of the Income Tax Appellate Tribunal MADRAS C Bench, Chennai dated 05.09.2008 passed in ITA.No.933/Mds/2007 relating to the assessment year 2004-2005 by formulating the following substantial questions of law:-

"1. Whether on the facts and circumstances of the case, the Tribunal was right in deleting the disallowance made by the assessing officer towards expenditure incurred by the assessee on techno-economic feasibility report for the manufacture of the new product?

2. Whether on the facts and circumstances of the case, expenses related to feasibility study for a new project which did not take off can be considered as a revenue expenditure?”

2. The material facts as culled out from the statement of facts in the memorandum of grounds of appeal are as follows:- For the assessment year 2004-2005, the assessee filed its return of income wherein it had claimed a sum of Rs.87,86,382/- as revenue expenditure, towards techno-economic feasibility report for the manufacture of new products. The assessing Officer disallowed the claim of the assessee and treated the same as capital expenditure. However, the Commissio