Suhas Chandra Sen, J. - (1.) The Tribunal has referred the following questions of law to this court under Section 256(1) of the Income-tax Act, 1961 ("the Act") : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the sum of Rs. 40,10,165 representing a provision made for payment of gratuity to the employees was an allowable deduction in computing the profits and gains of the assessee's business ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amounts paid to the employees as reimbursement of medical expenses incurred by them did not result directly or indirectly in the provision of any perquisites to the employees within the meaning of Section 40A(5) of the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 36,936 paid by the asses-see to British Oxygen Ltd., London, in pursuance of the agreement dated October 1, 1958, was a permissible deduction under Section 37(1) of the Income-tax Act, 1961 ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of the Appellate Assistant Commissioner and restoring the order of the Income-tax Officer in respect of the bad debt claim amounting to Rs. 1,05,406 ?"
(2.) In this case, the assessment year involved is 1972-73 for which the relevant accounting year is the year ending on September 30, 1971.
(3.) In view of the judgment of this court, in the case of CIT v. Eastern Spinning Mills Ltd. [1980] 126 ITR 686, question No. 1 is answered in the affirmative and in favour of the assessee.;