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 right in law in holding that deduction of amount on account of discount on bonds was an admissible business expenditure, was a referable question of law - Held, yes FACTS The Tribunal held that deduction on account of discount on bonds was admissible business expenditure in the relevant year. On reference : HELD The question as to whether Tribunal was right in law in holding that deduction of amount on account of discount on bonds was an admissible business expenditure was a referable question of law. Note : The decision is in favour of revenue : B. Gupta and R.C. Pandey for the Applicant. S.K. Aggarwal for the Respondent. JUDGMENT B.N. Kirpal, J-The Commissioner of Income-tax had, in the application under section 256(1), sought reference from the Tribunal on two questions of law which were as follows: "1.Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that deduction of Rs. 35,79,866 on account of discount on bonds was admissible business expenditure in this year? 2.Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that loss of Rs. 9,07,498 on transfer of shares to SAIL was a revenue loss?" The Tribunal dismissed the said application which led to the filing of the present petition under section 256(2). Curiously…

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