C.S.P.SINGH,J - (1.) THE Income Tax Appellate Tribunal (Delhi Bench B) has referred the following questions for our opinion : - "(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the amounts of Rs. 6,033/ - and Rs. 7,200/ - being remuneration and house rent paid to the director were permissible deductions in computing the assessees income from the firm in which the assessee company was a partner for the assessment years 1964 -65 and 1965 -66 respectively ? (2) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee company derives income from manufacturing or processing of goods and that the rate of income tax applicable would be 50%."
(2.) AT the outset, counsel for the Department conceded that the second question was concluded against the Department by the decision in Commissioner of Income Tax vs. M/s. Globe Engineers Private Ltd., Meerut reported in, 1972 U.P. Tax Cases 296.
(3.) WE till not state such facts as are necessary for answering the first question. The assessee had entered into a partnership in a concern styled as Messrs Hill Hardware Co., 72 Janpath, New Delhi. It had 50 per cent share in that firm. For the assessment year 1964 -65, the Income Tax Officer computed the total income of the assessee company at Rs. 1,05,589. In making this computation, he disallowed an amount of Rs. 3,633/ - remuneration paid to Sri Vishwanath Mehra, who was working as assessees Manager from 28 -3 -1946 and an amount of Rs. 2,400/ - house rent paid to him during this period. In the assessment year 1965 -66, the assessable income was computed at Rs. 1,36,401, after disallowing an amount of Rs. 4,800/ - claimed as remuneration paid to Sri Mehra and an amount of Rs. 2,400/ - as house rent paid to him. The assessee filed an appeal before the Appellate Assistant Commissioner, which was allowed following an earlier decision of the Tribunal. A second appeal by the Department also failed.;