Mohammad Ishaq Mohammad Gulam vs Commissioner of Income Tax

G.G. Sohani, Actg. C.J.

This is an application u/s 256(2) of the income tax Act, 1961 (hereinafter referred to as "the Act"). The material facts giving rise to this application, briefly, are as follows : The assessee filed a return for the assessment year 1975-76 showing a total income of Rs. 4,57,675. This return was subsequently revised by the assessee and the assessee claimed a deduction of Rs. 3,84,652 on account of expenditure in respect of "leave with wages" in accordance with the notification dated December 10, 1976, read with section 26(6) of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966. The income tax Officer, however, rejected that claim on the ground that no provision for that liability was made in the books of account. Aggrieved by the order passed by the income tax Officer, the assessee preferred an appeal which was allowed. The Revenue, therefore, preferred an appeal before the Tribunal. The Tribunal set aside the order passed by the Commissioner of income tax (Appeals). Aggrieved by the order passed by the Tribunal, the assessee sought a reference, but the application filed by the assessee in that behalf was rejected. Hence, the assessee has filed this application.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal:

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to claim any deduction for Rs. 3,84,652 on account of ''leave with wages'' under the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 ?"

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court. In the circumstances of the case, parties shall bear their own costs of this application.