Income-tax---

----Business expenditure---Remuneration to employees---Pension paid to retired employees---Not deductible---Indian Income Tax Act, 1961, S.37.

Held, that the Tribunal was correct in holding that the assessee company was not entitled to deduction of the amount representing payment of pension to the retired employees of the company in the computation of its income for the assessment years 1973-74, 1974-75 and 1975-76.

T. Stanes & Co. Ltd. v. CIT (1991) 188 ITR 237 (SC) and CIT v. T. Stanes & Co. Ltd. (1976) 105 ITR 251 (Mad.) fol.

P.P.S. Janarthana Raja for the Assessee.

C.V. Rajan for the Commissioner. .

JUDGMENT

At the instance of the assessee, the Tribunal referred the following three questions for the opinion of this Court for three assessment yearn, viz, 1973-74, 1974-75 and 1975-76 under section 256(1) of the Income Tax Act, 1961:

"(1)Whether the Tribunal was right in holding that the assessee is not entitled to a deduction of Rs.18,677 or any part thereof representing pension payment to retired employees of the company in the computation of income for the assessment year 1973-74?

(2)Whether the Tribunal was right in holding that the assessee is not entitled to a deduction of Rs.18,216 or any part thereof representing pension payment to retired employees of the company in the computation of income for the assessment year 1974-75?

(3)Whether the Tribunal was right in holding that the assessee is not entitled to a deduction of Rs.17,399 or any part thereof representing pension payment to retired employees of the company in the computation of income for the assessment year 1975-76?"

The issue involved in all these three questions is common. The point for consideration is whether the assessee is entitled to deduction of the amount representing pension payment to the retired employees of the company in the computation of income. In the ease of the same assessee, this Court in the decision reported in CIT v. T. Stanes & Co. Ltd. (1976) 105 ITR 251 held that such deduction is not possible. This decision of this Court was confirmed by the Supreme Court in the decision reported in T. Stanes & Co. Ltd. v. CIT (1991) 188 ITR 237. In view of the abovesaid decision rendered in the case of the same assessee, we hold that the Tribunal was correct in holding that the assessee is not entitled to a deduction towards the amount representing payment of pension to the retired employees of the company in the computation of income for the assessment years in question. Accordingly, we answer the questions referred to us in the affirmative and against the assessee. No costs.

M.B.A./.1241/FCReference answered.