Ajit K.Sengupta, J. - (1.) In this reference, the following two questions of law have been referred by the Tribunal pursuant to the order of this court under Section 256(2) of the Income-tax Act, 1961 ; "1. Whether, on the facts and in the circumstances of the case, the sum of Rs. 4,000 (rupees four thousand only) for the assessment year 1973-74 was a permissible deduction as a revenue expenditure ? 2. Whether, on the facts and in the circumstances of the case, the sum of Rs. 4,100 (rupees four thousand and one hundred only) for the assessment year 1972-73 was a permissible deduction as a revenue expenditure ?"
(2.) The questions relate to a matter relating to two successive assessment years 1973-74 and 1972-73. Shortly stated, the facts of the case are that the assessee-company claimed expenses of Rs. 4,100 and Rs. 4,000 being labour welfare expenses for the respective assessment years. According to the Income-tax Officer, the amount was spent on cost of construction of labour welfare fund quarters and, therefore, the assessee's claim was rejected. In this regard, he followed his orders for the earlier assessment years.
(3.) The matter was taken in appeal to the Appellate Assistant Commissioner who deleted the additions from the respective assessments by relying entirely upon the decision of the Madras High Court in CIT v. T.V. Sundaram Iyengar and Sons (P.) Ltd. [1974] 95 ITR 428, and the order of the Appellate Tribunal for the earlier years.;