Law:

Section:

Section 37(1) , read with section 256 of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessee claimed deduction in respect of pooja expenses and also expenses for bakshish and presentation - Tribunal held that expenditure was incurred for pooja performed by workers, and therefore, said expenditure should form part of welfare expenses - It further concluded that expenses on bakshish and presentation were also incurred in respect of workers alone - Accordingly, Tribunal accepted assessee's claim - Whether since conclusion of Tribunal was based on facts, no question of law arose out of order of Tribunal - Held, yes FACTS For the relevant assessment years, the assessee-company claimed deduction of certain amount incurred as pooja expenses and also expenses for bakshish and presentation. The ITO disallowed the claim and the said disallowance was confirmed by the A AC on appeal. On further appeal, the Tribunal pointed out that those expenses were incurred for the poojas, etc., performed by the workers and that they should form part of the welfare expenses. It also pointed out that, similarly, expenses on bakshish and presentation were found to have been incurred in respect of the workers alone. Hence, the Tribunal did not find any reason for the disallowance of those claims. The reference application made by the revenue was also dismissed. On application under section 256(2): HELD Having regard to the finding of the Tribunal that those expenses had been incurred only in respect of the workers, it was clear that the expenses had been rightly held to be ones incurred for the welfare of the workers. The conclusion of the Tribunal was based on the particular facts and, therefore, no question of law arose out of the order of the Tribunal. Note: The case has been decided in favour of the assessee. JUDGMENT Sethuraman, J. -The Commissioner of Income-tax, Tamil Nadu-III, Madras, has applied for a direction to the Tribunal in each of these two petitions for reference of the following…

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