1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (Lodg)NO.921 OF 2006 The Commissioner of Income Tax-5 ...Appellant vs. M/s.Essar Oil Limited. ...Respondent. --- Mr.Sureshkumar, for appellant. Mr.Soli Dastoor, Sr.Advocate with N.Shah & A.K.Jasani, for Respondent. CORAM: D.K.DESHMUKH & J.P.DEVADHAR, JJ. DATED: 16th October,2008. P.C.:- 1. The commissioner of income tax has raised following substantial questions of law:- 2 (a) The substantial question of law arises in the present appeal is regarding the correct interpretation of Section and other sections of the Income-tax Act,1961 and whether in the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was right in treating the expenses incurred by the assessee for the issuance of convertible debentures entirely revenue in nature? (b) The second substantial question of law arises in the present appeal is regarding the correct interpretation of section and other sections of the Income-tax Act,1961 and whether in the facts and in the circumstances of the case and in law, the Hon'ble Tribunal is justified in holding that the preliminary expenses incurred by the assessee prior to the commencement of its business activity as a revenue expenditure ? 3 2. As regards the first question is concerned, the Counsel on both the sides agree that the similar question raised in Income Tax appeal no.541 of 2008 “C.I.T. Vs. M/s.Siltap Chemicals Ltd, has been dismissed by this Court on 30.9.2008. 2. As regards the second question is concerned, the finding recorded by the Tribunal is that the assessee is engaged in the business of operation of rigs for extraction of oil and undertaking other oil related activities. It is further recorded by the Tribunal that in the interest of assessee's business and in continuation of the business carried on by it, the assessee had to explore the chances of development in the field of oil exploration for which it had to submit itself for bidding and tenders. The tribunal has held that submitting tenders and bids in the field of oil exploration is a highly sophisticated technical task for which the assessee company had to incur substantial amount of expenditure before submitting its bid. If the assessee is not successful in obtaining bid, such 4 expenditure is allowable as revenue expenditure. The Tribunal has held that merely because the assessee failed to secure a bid, the expenditure cannot be disallowed. The finding recorded by the tribunal is finding of fact. No question of law arises. Appeal is dismissed. (D.K.DESHMUKH, J.) (J.P.DEVADHAR, J.)