Ajit K.Sengupta, J. - (1.) In this reference made under Section 256(1) of the Income-tax Act, 1961, made at the instance of the Revenue, the following question has been referred for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the provision for land revenue of Rs. 41,046 was correctly treated as an allowable deduction for the assessment year 1973-74 ?"
(2.) The facts which are admitted and/or found by the Tribunal are as under : The assessee-company carries on the business in the manufacture and sale of tea and plywood. It owns two tea gardens which are situated in the State of West Bengal, The assessee-company follows the mercantile system of accounting. The previous year of the assessee relevant to the assessment year 1973-74 which is now in reference before this court is the calendar year 1972.
(3.) In the course of the assessment proceedings for the said year, the assessee-company claimed deduction in respect of rent and cess for the earlier year aggregating in all to Rs. 41,046 payable to the Government of West Bengal for its Mahalderam and Jungpara Tea Gardens in terms of the settlement arrived at between the Indian Tea Association and the Government of West Bengal.;