Deduction of discount on bonds treated as a referable question of law under income-tax reference provisions.

Deduction of discount on bonds was treated as a clear question of law, making it fit for reference under section 256(2) of the Income-tax Act, 1961. The petition was confined to the first question because no ground was raised or pressed on the second question. On that basis, the High Court directed the Tribunal to state the case and refer the specified question on the admissibility of deduction of discount on bonds.

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Issues: Whether the question concerning deduction of discount on bonds was a question of law fit to be referred to the High Court under section 256(2) of the Income-tax Act, 1961.

Analysis: The petition was treated as confined to the first question only, since no ground was raised or pressed regarding the second question. The Court found that the first question raised a clear question of law and therefore warranted a reference.

Conclusion: The Tribunal was directed to state the case and refer the specified question on admissibility of deduction of discount on bonds.

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