Law:

Section:

Section 256, read with section 56, of the Income-tax Act, 1961 - Reference - Question of fact - Assessee received certain bonus/commission from LIC in terms of employment - Department treated it as salary but on appeal Tribunal held it as income from business or profession - Whether finding of Tribunal that assessee was entitled to deduction at rate of 40 per cent of incentive bonus/commission by way of estimated expenses for earning income for which incentive bonus was paid, was purely a finding of fact and no referable question of law arose from its order - Held, yes FACTS The assessee had received, as per the terms of the employment bonus/commission from the LIC. The department treated it as salary income of the assessee. On appeal the Tribunal held that incentive bonus/commission received by the assessee was not salary income but income from business or profession. The Tribunal also held that on such incentive bonus/commission the assessee was entitled to deduction at the rate of 40 per cent of the bonus/commission by way of estimated expenses for earning the income for which incentive bonus was paid. The reference application of the department was rejected. On an application under section 256(2): HELD In the instant case it was evident that the department had not questioned the order of the Tribunal insofar as it concluded that the incentive bonus/commission received by the assesssee from the LIC was income from business or profession. What it had challenged was only that 40 per cent of the bonus /commission incentive should not have been allowed as deduction. The question that was sought to be referred to was, a question of fact which the High Court would not like to go into unless the question raised was that the finding or the conclusion by the Tribunal was perverse or without any material. Therefore, no question of law arose from the Tribunal's order. Dr. V. Balasubramanian, J.P. Deodhar and K.C. Sidhwa for the Applicant. K.B. Bhujle and…

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