BANERJEE,J. - (1.) THE following questions of law have been referred to this Court by the Tribunal under s. 256(1) of the IT Act, 1961 ('the Act').: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the commission and brokerage amounting to Rs.31,96,60 should not be considered for the purpose of computation of disallowance under s. 37(3A) of the IT Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that for the purpose of disallowance under s. 40A(5) of the IT Act, 1961, the amount of gratuity should not be considered.? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the amount of Rs.3,26,227 claimed to have been paid as incentive to the employees as per agreement between the employees of the assessee should be allowed, even though it exceeded the statutory limit prescribed under the payment of Bonus Act, 1965, and the agreement was concluded after the close of the accounting year ?"
(2.) THE assessment year involved in this reference is the asst. yr. 1980-81, for which the relevant period of account is the financial year ending on 31st March 1980. The first question is now concluded by the judgment of this Court in the case of CIT vs. Hindusthan Motors Ltd. (IT reference No.134 of 1985 dt. 23rd Feb., 1990) Following the above decision, the question No. 1 is to be answered in the affirmative and in favour of the assessee. The second question is answered by saying that two separate limits would be applicable in the case of the two employees who retired during the relevant previous year, viz., (1) when they were in employment, and (ii) after they retired. This aspect is covered by the principles laid down in the case of Hindustan Motors Ltd. vs. CIT (1985) 156 ITR 223 (Cal). Further, in calculating the salary and perquisites for the purpose of s. 40A(5) of the Act the amount of gratuity exempt under s. 10 (10) of the Act, should be excluded on the principles laid down by this Court in the case of Indian Oxygen Ltd. vs. CIT (1986) 56 CTR (Cal) 185 : (1987) 164 ITR 466 (Cal). Hence, this question is to be answered in the affirmative and in favour of the assessee. The third question is also now concluded by the decision of this Court in the case of CIT vs. Shawwallace Gillotine Ltd. (IT Ref. No.35 of 1983 dt. 22nd Aug., 1988). Following the aforesaid decision, this question is also to be answered in the affirmative and in favour of the assessee. Accordingly, all the three questions of law are answered in the affirmative and in favour of the assessee.
(3.) THERE will be no order as to costs.;