Deb, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, we are concerned with the following questions of law : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that a sum Rs. 50,000 paid to the two retiring directors was allowable as revenue expenditure on grounds of commercial expediency ?
(2.) If the answer to the above question is in the affirmative, then, whether the liability to pay the sum arose during the accounting year relevant to the assessment year 1964-65 and was, therefore, deductible in the assessment for the said year ? " 2. The assessee is a private limited company. The assessment year involved is 1964-65, for which the relevant previous year commenced on June 1, 1962, and ended on May 31, 1963.
(3.) The assessee claimed before the ITO that Rs. 50,000 paid to the two retiring directors was deductible in the assessment for the aforesaid year.;