- (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 the opinion of this Court: Whether, on the facts and circumstances of the case, the Tribunal is legally justified in holding that the income earned by the assessee -co -operative society from recovery of pay made from the staff, recovery of training cost and security forfeiture from staff is not attributable to its business of banking or providing credit facilities to its members and hence not deductible under Section 80P(2)(a)(1) of the Income -tax Act, 1961 ?
(2.) THE reference relates to the assessment year 1988 -89. Briefly stated the facts giving rise to the present writ petition are as follows:
(3.) THE assessee is a co -operative society engaged in the business of banking and providing credit facilities to its members. The receipts shown by it included the following items: Rs.(i) Pay recovered from resigned staff 20,377(ii) Recovery of training cost 3,17,016(iii) Security forfeiture 3,141;