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Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1997-98 - Assessee-company was engaged in manufacture and supply of automobile components to various automobile companies in India - It claimed deduction in respect of amount spent by it to educate its two directors under section 37(1) contending that it had sponsored said two directors for higher education in connection with specialized intensive training in field of general management, marketing, finance and information technology, including project strategy, with a condition that after securing higher education, they would serve assessee-company as directors and, thus, sponsorship of two directors was for benefit of company - Assessing Officer disallowed assessee's claim on ground that said two directors were children of managing director of company - On appeal, disallowance was confirmed - Whether just because said two directors were children of managing director of company, it could not be a ground for Assessing Officer to reject claim of assessee, until and unless it was established that those two directors, sponsored to acquire higher education, were not connected with business of assessee-company - Held, yes - Whether since vital issue had not been considered by Assessing Officer and appellate authorities, all orders were to be set aside and matter was to be remanded to Assessing Officer for fresh consideration - Held, yes JUDGMENT K.L. Manjunath, J. - The assessee has come up in this appeal, challenging the concurrent findings on the order passed by the Assessing Officer by the Commissioner of Income-tax (Appeals), which has been confirmed by the Income-tax Appellate Tribunal in ITA No. 711/Bang./2001, dated 10-2-2004 for the assessment year 1997-98. 2. The appeal is admitted to consider the following substantial questions of law :- "1.Whether the Tribunal was right in law in confirming the order of respondent through the confirming order passed by the Commissioner of Income-tax on grounds 7 and 8, when the same was not a speaking order? 2.Whether the Tribunal was right in law in confirming the order of respondent when admittedly the said order had not…

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