Sen, J. - (1.) In this reference, on an application of the Commissioner of Income-tax, West Bengal-III, Calcutta, under Section 256(2) of the I.T. Act, 1961, this court directed the Tribunal to draw up a statement of case and refer the following questions for the opinion of this court as questions of law arising from its order : "1. Whether, on the facts and in the circumstance of the case and on a proper interpretation of the Essential Commodities Act, 1955, and the amendments to the Sugarcane (Control) Order, 1955, on the 23rd September, 1958, and the letters dated the 28th December, 1964, and 11th April, 1967, of the Government of India, the Tribunal erred in holding that liability for payment of Rs. 52,556.80 as additional price for sugarcane accrued during the previous year ended on 30th September, 1960, and was allowable as deduction for the assessment year 1961-62. 2. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the payment of Rs. 63,770 to M/s. Indian Sugar Supplying Agency and Rs. 3,986 to Sri S.S. Singhania was an allowable deduction under Section 10(2)(xv) of the Indian Income-tax Act, 1922?"
(2.) It appears to us that question No. 1 is covered by a decision of this court in CIT v. Swadeshi Mining and Manufacturing Co. Ltd. Following the said decision, we answer the question in the negative and in favour of the assessee.
(3.) The facts relevant to the second question as found and/or admitted in these proceedings are shortly as follows : The assessee is a company engaged in the manufacture and sale of sugar and in the assessment year 1961-62, the corresponding accounting year being that ended on the 30th September, 1960, it carried on such activities.;