R.K.AGRAWAL,J. - (1.) THE Income -tax Appellate Tribunal, Allahabad, has referred the following questions of law under Section 256(1) of the Income -tax Act, 1961, hereinafter referred to as 'the Act', for opinion to this court: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in recalling the proceedings to consider the applicability of Section 40A(9) of the Income -tax Act, 1961?
(2.) WHETHER after finding the provisions of Section 40A(9) do not apply to the facts of the present case, the Appellate Tribunal was legally justified in sustaining the disallowance at Rs. 51,165? 2. The present reference relates to the assessment year 1980 -81. Briefly stated the facts giving rise to the present reference are as follows:
(3.) THE applicant is a public limited company and is regularly assessed to income -tax, by the concerned Assessing Officer at Kanpur. In the assessment year 1980 -81 based on the accounting year ended December 31, 1979, amongst other, it claimed deduction of Rs. 78,896 on account of contribution made by it towards daughter's marriage benefit scheme. Such a deduction was claimed as an admissible expense being in the nature of staff welfare expenses. The Assessing Officer observed that the payment cannot be treated as obligatory and also cannot be treated expenses towards staff welfare necessary for business. Further, he held that the contribution was not under any irrevocable trust divesting the company of control and authority over such funds. Further the expenditure is neither obligatory under the Factories Act nor customary to the trade in which company is engaged. As such the expenditure was not treated as business expenditure and the same was disallowed.;