OM PRAKASH,J. - (1.) The Commissioner of Income -tax, Allahabad, has referred the following two questions, said to arise from the Income -tax Appellate Tribunal's order, Allahabad Bench, relating to the assessment year 1972 -73, for our opinion under Section 256(1) of the Income -tax Act, 1961 : '(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no remission of the liabilities during this year and in deleting the addition of Rs. 33,767 sustained on this account by the Appellate Assistant Commissioner ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest paid by the assessee on arrears of cane cess and cane purchase tax was admissible deduction ?'
(2.) FIRST we take up question No. (i). The brief facts are that the assessee transferred liabilities aggregating to Rs. 1,16,766.63 from the accounts under different heads to the general reserve account, which areas follows : Rs. 1. Transfer from EmployeesProvident Fund Equalization Fund - - - - 16,704 -20 2. Transfer from I. K. Sugar MillsEmployees Provident Fund Trust a/c number 13,326 -33 Transfer from I. K. Sugar Millsexcluded Employees and Officers Trust No.2 10,550 -27
(3.) , Transfer from reserve fordividend equalisation fund 7,917 -59;