- (1.) THIS is a reference under s. 256(1) of the IT Act, 1961 to answer the following questions of law, namely : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the disallowance of guarantee commission in excess of 1 per cent of guarantee to the finance raised by the Co. (paid by the company to the five guarantors) cannot be sustained under s. 40A (2) of the IT Act, 1961 ? Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the guarantee commission has to be considered only in the light of the provisions of s. 40(c) of the Act ?
(2.) THE relevant assessment years are3 1971-72, 1972-73 and 1973-74. In respect of the same assessee and on the same facts for two earlier assessment years, namely, 1969-70, and 1970-71, the same questions were referred for decision of this Court in IT Ref. No. 12/ 1979 (CIT vs. Ayurvedic Sevashram (P) Ltd. 1986 54 CTR (Raj) 119). This Court, by its order dt. 24th July, 1985 passed therein, answered the first question in favour of the assessee and held that it was not necessary to decide the second question in view of the answer to the first question. There is no controversy before us that the present referred questions have to be answered similarly following the aforesaid earlier decision of this Court. Consequently, we answer the aforesaid first question in favour of the assess and hold the decision of second question is not necessary, No order as to costs.;