- (1.) ON the third question, the High Court answers in favour of the assessee by following earlier decision in the case of Hindustan Motors. It is pertinent to note that in the case of Hindustan Motors the question was answered on the basis of s. 40A(5)(a) and (c) No doubt an alternate contention was raised there by the assessee that gratuity up to the limit of Rs. 30,000 if paid to an employee at or after his retirement could not be included in the income of the employee as salary under s. 10(10)(iii) of the Act. Sub-ss (1) and (3) of s. 17 and s. 40A(5)(c) should be read along with s. 10(10)(iii) and be given an harmonious construction and Rs. 30.000 should, in any event, be excluded before imposing the limit of Rs. 60,000. However the Court observed that view of the matter, it is not necessary for us to express any opinion on the other contention of Mr. Bajoria raised for the first time before us, as regards the exclusion of Rs.30,000 under s. 10(10)(iii) in determining the limits imposed by s. 40A(5)(c). That apart, the further observations of the Court by way of obiter that "What is exempt in the hands of the employee may not be a relevant consideration in determining the limits of deduction in computing the income of the employer" go against the assessee and not in his favour. So, the decision in Hindustan Motors has wrongly been followed in the present case. The learned counsel for the Revenue should have pointed out these facts and the question should have independently been with in the present case. Judgment bhagabati prasad banerjee, J.: The Tribunal has referred to this Court the following questions of law under s. 256(1)of the IT Act.1961: "1 Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition made under the head "Tea, tiffin, food, salary to guest house staff and depreciation on guest house 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that contribution to 'molasses Storage Reserve Fund was a revenue expenditure ?" 3. whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that only such gratuity was includible in computing the expenditure as was in excess of the amount of exemption provided in s. 10(10) of the IT Act, 1961 ? 4. Whether, on the facts and in the circumstances of the case, the Income-tax Tribunal was justified in law in holding that the assessee was entitled to relief under s. 80C of the Act, 1961 in respect of the donation of Vishwa Mangal Trust ?"
(2.) THE assessment year involved is 1978-79 for which the relevant accounting period ended on 30th June, 1977. The first question is now concluded by a decision of this Court in IT Ref. No. 312 of 1961 in the case of CIT vs. Bharat Sugar Mills Ltd. Judgment wherein was delivered on 7th June, 1989. Following the said decision, this question is answered in the affirmative and in favour of the assessee.
(3.) THE second question is also concluded by a decision of this Court in IT Ref. No 166 of 1985 in the case of CIT vs. New India Sugar Mills judgment wherein was delivered on 12th April, 1990 since reported in (1992) 107 CTR (Cal) 258. Following the said decision, this question is answered in the affirmative and in favour of the assessee.;