Ajit Kumar Sengupta, J. - (1.) At the instance of the Commissioner of Income-tax, the following six questions of law have been referred to this court under Section 256(1) of the Income-tax Act, 1961, for the assessment years 1971-72, 1972-73 and 1973-74 : "(1) Whether, on the facts and in the circumstances of the the case, the disallowance to be made under Section 40(a)(v)/40A(5) of the Income-tax Act, 1961, in the case of the assessee for the accounting years 1971-72, 1972-73 and 1973-74 in the matter of rent should be on the line of the formula laid down in rule 3 of the Income-tax Rules, 1962, and not on the basis of the actual expenditure incurred by the assessee for providing accommodation to the employees in each of the said years. (2) Whether, on the facts and in the circumstances of the case, the reimbursement of medical expenses by the assessee to its employees is to be considered as perquisite, benefit or amenity for the purpose of Section 40(a)(v) of the Income-tax Act, 1961. (3) Whether, on the facts and in the circumstances of the case, the expenses of the club bills reimbursed by the assessee to its employees should be excluded from the computation of the total expenditure for the purpose of the disallowance under Section 40(a)(v) of the Income-tax Act, 1961. (4) Whether, on the facts and in the circumstances of the case, the expenditure incurred by the assessee by way of legal expenses pertaining to the transfer of its registered office from Calcutta to New Delhi is an allowable revenue expenditure in computing the total income of the assessee for the accounting period relevant to the assessment year 1972-73. (5) Whether, on the facts and in the circumstances of the case, the provision for gratuity estimated on actuarial basis is an allowable revenue deduction in computing the income of the assessee for the accounting period relevant to the assessment year 1972-73. (6) Whether, on the facts and in the circumstances of the case, the Income-tax Officer, in the absence of proof of understatement of the consideration, could invoke the provisions of Section 52(2) of the Income-tax Act, 1961, for the purpose of computing the capital gains in respect of the transfer of 2,600 shares of Kalinga Tubes Ltd. by the assessee in the accounting period relevant to the assessment year 1973-74."
(2.) It is not in dispute that some of the questions are concluded by decisions of this court or of the Supreme Court. Only two questions would require consideration in this case. Before dealing with these questions, the questions which are concluded are answered first.
(3.) The second question is concluded by the decision of this court in Indian Leaf Tobacco Development Co, Ltd. v. CIT [ 1982 ] 137 ITR 827.;