Law:

Section:

Section 37(1), read with section 256 of the Income-tax Act, 1961 - Business expenditure - Allowability of - Whether question as to whether Tribunal was correct in law in holding that sum spent on managing director's house was an allowable deduction by ignoring material fact that these expenses never related to assessee's business was a question of law arising out of Tribunal's order - Held, yes Section 28(i), read with section 256 of the Income-tax Act, 1961 - Business income - Chargeable as - Whether question as to whether Tribunal was correct in law in holding that excess price realised by assessee on sugar was not a revenue receipt in hands of assessee-company and, as such, not taxable in its hands, was a question of law arising out of Tribunal's order - Held, yes Note: The decision is in favour of revenue. CASE REVIEW CIT v. Bijli Cotton Mills (P.) Ltd. [1979] 116 ITR 60 (SC)followed and relied upon. CASES REFERRED TO CIT v. Bijli Cotton Mills (P.) Ltd. [1979] 116 ITR 60 (SC). JUDGMENT V.K. Khanna, J. - This is an application under section 256(2) of the Income-tax Act, 1961, praying that the Income-tax Appellate Tribunal, Delhi, be asked to draw up a statement of the case and to refer the four questions mentioned in paragraph 7 of the application for the opinion of this court. Having heard learned counsel for the parties at some length, we are of the opinion that question No. (i) is covered by the decision of this court dated December 9, 1987, given in ITA No. 60 of 1986, pertaining to the assessment year 1971-72 between the same parties. As far as question No.…

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