Sabyasachi Mukharji, J.
1. In this reference, two questions have been referred. The questions are as follows
' 1, Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that motor car allowance was not a perquisite within the meaning of Section 40(c)(iii) merely because it was paid in cash and, therefore, the ceiling in Section 40(c)(iii) could not apply to it ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the assessee-company was a manufacturer of automobile ancillaries and, therefore, eligible for rebate of 35% on corporate tax '
2. In view of the decision of this court in the case of CIT v. Kanan Devan Hills Produce Co. Ltd. : [1979]119ITR431(Cal) , question No. 1 must be answered, in view of the facts found by the Tribunal, in the negative and in favour of the assessee.
3. So far as question No. 2 is concerned, it appears that the AAC gave the following direction:
'The company manufactures automobile ancillaries (item 21 in Part III of the list of articles and things). The ITO is, therefore, wrong in taxing the income at 60%. The ITO is directed to verify and adopt the correct rate.'
4. The Appellate Tribunal dealing with this contention observed as follows:
'The last contention relates to the AAC's action in granting 35% rebate in the corporate tax on the ground that the assessee manufactures automobile ancillaries. There is no specific discussion in the assessment order on this point and the AAC allowed the assessee's claim for reasons mentioned by him in paragraph 21 of his order. The relief was given by the AAC in view of item No. 21 in Part III of the list of articles and things in the Schedule to the Finance Act, 1965. The departmental representative stated that the AAC was wrong in allowing the relief while the assessee's counsel said that there could be absolutely no two opinions about the AAC's action being right. We have looked up Part III of the Schedule to the Finance Act, 1965, and find that item No. 21 specifically refers to automobile ancillaries. The assessee is clearly entitled to rebate as given by the AAC for reasons mentioned by him in para. 21 of his order. We endorse the reasoning and the-conclusion of the AAC on this point as given in para. 21 of his order. '
5. In that view of the matter and in the facts and circumstances of the case, question No. 2 must be answered in the negative and in favour of the assessee.
6. In the facts and circumstances of the case, parties will pay and bear their own costs.
Sudhindra Mohan Guha, J.
7. I agree.