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TMI Blog2002 (2) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... on on account of payment of wages/salary in lieu of leave to various employees. This claim was also allowed by the Tribunal by reversing the decisions of the assessing and the appellate authorities. Aggrieved by the order of the Tribunal the Revenue filed a petition under section 256(1) of the Act for reference to this court. The application was accepted. The following questions have been referred to this court for opinion: "(b) Whether, on the facts and circumstances of the case, on a proper interpretation of section 35B, the Appellate Tribunal was right in law in allowing weighted deduction of the following items of expenditures claimed by the assessee for the assessment year 1976-77: (i) Commission/service charges paid to the S.T.C./ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious heads of section 35B. The matter shall be decided after consideration of the relevant material. So far as question (d) is concerned, it has been submitted by Mr. Sanjay Bansal, learned counsel for the assessee, that regular payments were made to the employees in lieu of the unavailed leave. Since the payment had been made, the assessee is entitled to the deduction as claimed. It has been further pointed out that similar deductions had been allowed prior to and after the assessment year 1976-77. Reliance has been placed on the decision of their Lordships of the Supreme Court in Bharat Earth Movers v. CIT [2000] 245 ITR 428. Mr. Sawhney controverts the claim and submits that the deduction can be claimed only if the conditions stipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view taken by the authorities is in conformity with the decision of their Lordships of the Supreme Court in the case of Bharat Earth Movers [2000] 245 ITR 428.
Resultantly, the deduction as claimed by the assessee is rightly allowed.
The question is answered in favour of the assessee and against the Revenue.
In view of the above, so far as questions (b) and (c) are concerned, the matter is remitted to the Tribunal for decision in accordance with the dictum of their Lordships of the Supreme Court in the cases of Stepwell Industries Ltd. [1997] 228 ITR 171 and Hero Cycles Pvt. Ltd. [1997] 228 ITR 463. So far as question (d) is concerned, it is answered against the Revenue and in favour of the assessee. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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