COMMISSIONER OF INCOME TAX Vs. RAJKUMAR MILLS LIMITED

JUDGEMENT

(1.) IN connection with the computation of its income for the accounting year 1949, the assessment year being 1950 -51, the respondent -assessee mills company claimed deduction of the respective amounts of Rs. 4,16,604 and Rs. 1,75,246. The Tribunal accepted the company's case in respect of the sum of Rs. 4,16,604, but rejected the company's case in respect of the sum of Rs. 1,75,246. In this reference, the questions Nos. 1 and 3 relating to these two amounts are as follows :

(2.) THE first question is raised at the instance of the CIT and the third question at the instance of the assessee company.

(3.) NOW , Mr. Joshi for the Revenue has fairly drawn our attention to the decision of the Supreme Court from the above referred decision of the Madhya Pradesh High Court in the matter of CIT vs. Swadeshi Cotton & Flour Mills Pvt. Ltd. (1964) 53 ITR 134. The Supreme Court rejected the appeal filed by the CIT and upheld the decision of the High Court of Madhya Pradesh. In that case, the question related to a large amount paid by way of bonus for the calendar year 1947 in terms of an award made on January 13, 1949. The question of law referred to the High Court was :