Ajit K. Sengupta, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, made at the instance of the assessee for the assessment years 1968-69 and 1969-70, the following questions, of law have been referred to this court: "1. Whether, on the facts and in the circumstances of the case, the liability of the assessee-company under the Payment of Bonus Act, 1965, should be determined at Rs. 67,678 as claimed by it and is deductible in determining its total income under the Income-tax Act, 1961, for the assessment year 1968-69"
(2.) Whether, on the facts and in the circumstances of the case, the deduction of Rs. 37,840 being the amount of 'set on' under the Payment of Bonus Ac,t, 1965, as claimed by the assessee-company was a lawful one for the purpose of accurate reflection of the time costs of earning its year's receipts under the Income-tax Act, 1961, for the assessment year 1968-69 ?
(3.) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the sum of Rs. 37,840 being the amount of 'set on' under the Payment of Bonus Act, 1965, was a non-deductible provision only for the purpose of determining the total income of the assessee-company under the Income-tax Act, 1961, for the assessment year 1968-69 ?." Assessment year 1969-70 : "1. Whether, on the facts and in the circumstances of the case, the liability of the assessee-company under the Payment of Bonus Act, 1965, should be determined at Rs. 85,638 as claimed by it and is deductible in determining its total income under the Income-tax Act, 1961, for the assessment year 1969-70 ? 2, Whether, on the facts and in the circumstances of the case, the deduction of Rs. 42,000 being the amount of 'set on' under the Payment of Bonus Act, 1965, as claimed by the assessee-company was a lawful one for the purpose of accurate reflection of the time costs of earning its year's receipts under the Income-tax Act, 1961, for the assessment year 1969-70. 3. Whether,, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the sum of Rs. 42,000 being the amount of 'set on' under the Payment of Bonus Act, 1965, was a non-deductible provision only for the purpose of determining the total income of the assessee-company under the Income-tax Act, 1961, for the assessment year 1969-70 ?" 2. The assessee in its books for the first year made a provision of Rs. 33,840 for a future contingency for the payment of bonus under the Payment of Bonus Act, 1965. The claim of the assessee for the deduction of the said amount was negatived by the Income-tax Officer. 3. Aggrieved thereby, the assessee brought the matter by way of appeal before the Appellate Assistant Commissioner. It was contended before him by the assessee that the said amount of Rs. 33,840 being the bonus payable to the employees of the assessee as determined under Section 15(1) of the Payment of Bonus Act, 1965, should have been allowed as a deduction for the computation of the total taxable income of the assessee. This argument of the assessee was rejected by the Appellate Assistant Commissioner.;