- (1.) The Tribunal, Allahabad, has referred the following questions of law under Section 256(1) of the IT Act, 1961 (hereinafter referred to as the Act), for opinion of this Court : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the interest on the interest-bearing loans did not accrue to the assessee during the asst. yrs. 1975-76 and 1976-77 because suits for the recovery of the loans were pending ? 2. Whether the Tribunal was justified in putting off the dates of the accrual of interest inspite of the fact that the assessee followed the mercantile system of accounting and the loans were interest-bearing ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amounts of Rs. 7,95,380 and Rs. 13,91,177 as interest accrued, were not includible in the total income of the assessee in the asst. yrs. 1975-76 and 1976-77, respectively ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the deduction under Section 36(1)(viii) of the IT Act, 1961, should be regulated with reference to the total income computed before making any deduction under Section 36(1)(viii) of the said Act ?
(2.) The present reference relates to the asst. yrs. 1975-76 and 1976-77. The Tribunal, while deciding the appeal in favour of the assessee, has relied upon its earlier order for the asst. yrs. 1969-70 to 1974-75.
(3.) We have heard Sri A.N. Mahajan, learned standing counsel appearing for the Revenue, and Sri P.S. Baghel, learned counsel appearing for the assessee-opposite party.;