Law: Income Tax Act, 1961

Section: 256(2)

Income-tax-----Reference---Business expenditure---Bonus---Time when liability for bonus arose---Question of law. Held, that the question whether the Tribunal was justified in finding that accrual of liability for bonus of Rs.6 lakhs arose after the accounting year was a question of law. State Bank of Travancore v. CIT (1986) 158 ITR 102 (SC) ref. JUDGMENT B.P. JEEVAN REDDY, CJ.---By this application, the assessee is asking the following four questions to be referred under section 256(2) of the Income-tax Act, 1961: "1. Whether the Income-tax Appellate Tribunal was justified in finding that accrual of liability of bonus of Rs.6 lakhs arose after the accounting period? 2. Whether the Income-tax Appellate Tribunal was justified in finding that there was real income on sticky accounts on which no interest was charged? 3. Whether the Tribunal was justified in not considering and accepting the bona fide change in system of accounting from the mercantile to cash system on sticky accounts and charging interest on these accounts? 4.…

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