N.N.MATHUR,J. - (1.) HEARD Mr. Sandeep Bhandawat for the Revenue applicant and Mr. Suresh Ojha for the respondent- assessee.
(2.) BOTH these applications under S. 256(2) of the IT Act, 1961, hereinafter referred to (as the Act of 1961), which pertain to the asst. yr. 1994-95, have been filed at the instance of the Revenue seeking mandamus to the Tribunal for drawing up statement of case and to refer the following common question for the opinion of this Court : "Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that in the case of a firm where profit is computed by applying net profit rate, deduction for salary and interest is separately allowable under S. 40(b) of the IT Act, when in fact S. 40(b) does not provide for any deduction, but places ceiling on the deduction allowable ?" It is submitted by Mr. Sandeep Bhandawat, learned counsel for the Department that on the same point, the Department has already filed Reference Application under S. 256(2) of the Act, which has been registered as CIT vs. Jain Construction Co. (D.B. IT Case No. 12 of 1998). We have decided the said reference today [reported as CIT vs. Jain Construction Co. (1999) 156 CTR (Raj) 290-Ed.]. Thus, for the reasons and conclusions arrived at in the decision rendered by us in the said Reference, no question of law arises out of the order of the Tribunal.
(3.) IT is next submitted by the learned counsel for the Revenue Mr. Bhandawat that the Tribunal has erred in law in not appreciating the fact that the proviso to S. 44AD(2), which allows deduction of salary and interest paid to its partners, refers to computation of income made under S. 44AD(1) whereas the assessment was finalised under S. 44AD(5). The proviso has no application to the assessment completed under S. 44AD(5).;