JUDGMENT
J.S. Verma, C.J.
1. This order shall also dispose of Miscellaneous Civil Case No. 559 of 1981, since both the cases involve the same points.
2. Both these cases arise out of applications made under Section 256(2) of the Income-tax Act, 1961, for a direction to the Income-tax Appellate Tribunal to state the case and refer for decision by this court the question of law said to arise out of the Tribunal’s order. Having heard both sides, we are satisfied that no such direction is required to be made in these cases.
3. The assessee in each case is a manufacturer of bidis, and follows the mercantile system of accounting. During the relevant year, the assessee in each case made provision for payment of wages to its workers for the weekly holiday as required by Section 21 of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966. The amount so provided by the assessee was claimed as a deduction under Section 37 of the Income-tax Act, 1961. The Income-tax Officer disallowed the claim for this deduction but on appeal, the Commissioner of Income-tax (Appeals) allowed that deduction. The Tribunal has upheld the view taken by the Commissioner of Income-tax (Appeals) in a further appeal. Aggrieved by the view taken by the Tribunal, the Commissioner of Income-tax applied to the Tribunal for making a reference to this court to decide the questions of law said to arise out of the Tribunal’s order. That application has been rejected by the Tribunal. Hence, this application under Section 256(2) of the Act by the Commissioner of Income-tax.
4. The fact that provision has been made in the accounts of the assessee maintained according to the mercantile system, to provide for the liability it has already incurred during the relevant year under Section 21 of the Bidis and Cigar Workers (Conditions of Employment) Act, 1966, is beyond controversy. The case does not involve any dispute about the quantification of this liability. The only question, therefore, is whether this statutory liability having been incurred by the assessee in the manner stated and provision having been made in the assessee’s accounts maintained according to the mercantile system, the same was rightly allowed as a permissible deduction by the Tribunal. We find that the matter is concluded by the decisions of this court particularly in Addl. CIT v. Kale Khan Mohammad Hanif [978] 114 ITR 812 and Kalekhan Mohammed Hanif v. CIT [1987] 163 ITR 769 (MP) (infra) wherein similar deductions were allowed on the same principle. Since the point is settled by the decisions of this court following the principle laid down by the Supreme Court in Kadarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363, the question now is merely of an academic character and no useful purpose would be served by requiring the reference to be made for deciding the point concluded in this manner.
5. Consequently, the application made by the Commissioner of Income-tax under Section 256(2) of the Act is dismissed. There shall be no order as to costs.