PRADEEP PICTURES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the I.T. Act, 1961 (hereinafter referred to as "the Act").

(2.) THE applicant-assessee is a partnership firm registered under the Act. For the assessment year 1972-73, for which the accounting period ended on 31st December, 1971, the assessee contended that the amount of Rs. 26,271, which was paid by the assessee to the employees of Raj theatre on account of retrenchment compensation payable under the provisions of the Industrial Disputes Act, 1947, was an allowable expenditure in computing the income of the firm. THE claim of the assessee was, however, rejected by the ITO. On appeal, the AAC upheld the finding of the ITO in this behalf. On further appeal, the Tribunal held that the expenditure incurred by the assessee could not be said to be an expenditure laid out and incurred wholly and exclusively for the purpose of business. In this view of the matter, the Tribunal dismissed the appeal. An application for making a reference filed by the assessee was also rejected by the Tribunal. Hence, the assessee has filed this application.