Referable question of law on leave-wages deduction justified a reference under income-tax procedure.

The High Court held that the assessee's claim for deduction of expenditure on leave with wages under the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 raised a question of law arising from the Tribunal's order. Applying the statutory test under section 256(2) of the Income-tax Act, 1961, the Court found that the reference threshold was satisfied. It therefore directed the Tribunal to state the case and refer the framed question, accepting the reference request in favour of the assessee.

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Issues: Whether, on the facts and in the circumstances of the case, a question of law arose from the Tribunal's order so as to justify directing a reference on the assessee's claim for deduction of expenditure on account of leave with wages.

Analysis: The application was under section 256(2) of the Income-tax Act, 1961. The Court found that the controversy whether the assessee was entitled to deduction of the amount claimed as leave with wages under the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 raised a question of law arising from the Tribunal's order. Since the statutory test for reference was satisfied, the Court directed the Tribunal to state the case and refer the question framed by it.

Conclusion: A referable question of law did arise, and the request for reference was accepted in favour of the assessee.

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