Sabyasachi Mukharji, J. - (1.) In this reference, two questions have been referred. The questions are as follows " 1, Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that motor car allowance was not a perquisite within the meaning of Section 40(c)(iii) merely because it was paid in cash and, therefore, the ceiling in Section 40(c)(iii) could not apply to it ? Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the assessee-company was a manufacturer of automobile ancillaries and, therefore, eligible for rebate of 35% on corporate tax ? "
(2.) In view of the decision of this court in the case of CIT v. Kanan Devan Hills Produce Co. Ltd. question No. 1 must be answered, in view of the facts found by the Tribunal, in the negative and in favour of the assessee.
(3.) So far as question No. 2 is concerned, it appears that the AAC gave the following direction: "The company manufactures automobile ancillaries (item 21 in Part III of the list of articles and things). The ITO is, therefore, wrong in taxing the income at 60%. The ITO is directed to verify and adopt the correct rate.";