The High Court dismissed the revenue’s appeal, holding that the contribution made by the assessee to the Compensatory Afforestation Fund (CAF) was allowable as revenue expenditure under Section 37(1). The Court observed that the issue was no longer res integra, as it was squarely covered by a previous decision of the Bombay High Court in CIT v. Dr. Prafulla R. Hede [Tax Appeal No. 15 of 2012, dated 6-2-2012 (Bom)(HC)(UR).   Since the Special Leave Petition filed by the revenue against that decision had been dismissed by the Supreme Court, the High Court concluded that the expenditure was not capital in nature and that no substantial question of law arose for consideration. (AY. 2006-07)