P.B.Mukheji, J. - (1.) In this Income-tax Reference the main question is: "whether on the facts and in the circumstances of the case the sum of Rs. 5,60,199 was an admissible deduction in computing the business profits of the assessee."
(2.) That was the question which the Tribunal at first referred to the High Court. This Court, however, asked for a further statement on the following questions:-- "1 Whether there is any evidence in support of the Tribunal's finding that the assessee company has stood guarantee for the loan given to Messrs U.P Sales Corporation Ltd. by the Gwalior Industrial Bank Ltd. 2. If the answer to Q. 1 above be in the affirmative then whether there is any evidence to show that the assessee company stood such guarantee in the ordinary course of its business. 3. If the answer either to Q. 1 or Q 2 above be in the negative then whether the sum of Rs. 5,60,199 was allowable as a deduction in computing profits of the assessee."
(3.) To appreciate the points of law and the state of evidence of this case for appeal to the Supreme Court, it will be appropriate to pin-point the relevant facts. The assessee is Birla Brothers Private Limited. They acted as Managing Agent of various companies, one of which was Messrs, Starch Products Limited.;