Ajit K. Sengupta, J. - (1.)This is a reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1972-73. While making the assessment for the said assessment year, the Income-tax Officer made an addition of Rs. 25,000 with the following remarks :
"As directed by the Inspecting Assistant Commissioner R-IX, Calcutta, under Section 144B on page 4 of his order in the matter of payment to M/s. Industrial Development Corporation Pvt. Ltd., Bangalore, towards charges for preparation of feasibility report of Calcium Carbide Project for Madras and Mangalore Division."

(2.)Before the Appellate Assistant Commissioner, it was claimed by the assessee that the addition should not have been made as it was a revenue expenditure. The Appellate Assistant Commissioner, however, found that this was entirely a new project undertaken by the company and, therefore, could not be taken as a revenue expenditure. The disallowance was, therefore, upheld.
(3.)Before the Tribunal, in support of the ground against the above addition, counsel for the assessee did not submit that it was to be allowed as revenue expenditure. He, however, submitted that the addition made by the Income-tax Officer was illegal. He pointed out that in the draft assessment prepared by the Income-tax Officer it was not disallowed and, therefore, the disallowance of this amount as a result of the direction of the Inspecting Assistant Commissioner in his order under Section 144B was illegal. It was contended that the scope of Section 144B was limited to the objection which the assessee raised and the Inspecting Assistant Commissioner could not give any direction where there was no objection by the assessee. It was also contended on behalf of the assessee that this was a question of law which had not been raised before the Appellate Assistant Commissioner but could be raised before the Tribunal.