Judgment:
1. The petitioner seeks reference of the following two questions to this court :
'1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct both on facts and in law in confirming the order of the Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 8,21,755 made by the Inspecting Assistant Commissioner under section 36(1)(ii) on account of bonus paid in excess of the prescribed limit
2. Whether, on the facts and in the circumstance of the case, the Income-tax Appellate Tribunal was correct both on facts and in law in confirming the order of the Commissioner of Income-tax (Appeals) holding that the sum of Rs. 2,41,298.01 is not taxable under the provision of section 41(1) of the Income-tax Act ?'
2. As regards question No. 1, the respondent had paid to its workmen bonus under the Payment of Bonus Act as well as other types of bonus such as production bonus, attendance bonus and incentive bonus. In addition thereto, an ex gratia payment of Rs. 1,08,751 was also paid. The Commissioner of Income-tax (Appeals) as well as the Tribunal came to the conclusion that the aforesaid types of payments which were made were not under the provisions of section 36(1)(ii) of the Income-tax Act, 1961, but were payments which were allowable as revenue expenditure having been incurred for the purpose of business expendiency. In other words, the findings of the Tribunal were that the payment was made for the purpose of the assessed's business and would be clearly covered by the provisions of section 37 of the Act. These payments were not of the type contemplated by the Payment of Bonus Act and, thereforee, section 36(1)(ii) was not attracted. The aforesaid finding that the payment was made for the purpose of business expendiency is a pure finding of fact and, in any case, the answer to the question proposed is self-evident.
3. As regards question No. 2, we find that the Tribunal had agreed with the finding of the Commissioner of Income-tax (Appeals) that there was no evidence at all to hold that any liability had ceased to exist. It further held that there was consolidation of various accounts and no liability had been written off. In view of this finding, it rightly came to the conclusion that the provisions of section 41 were not attracted. The question whether liability continued to exist or not is a question of fact. The finding of fact is that the liability continued to exist. This being so, the provisions of section 41 would be clearly inapplicable. No question of law, thereforee, arises in this case. The petition is dismissed. No order as to costs.