D.R. Dhanuka, J.@mdashDuring the relevant assessment years 1988-89 and 1989-90 the respondent worked as the agent of the Life Insurance Corpn. of India and received the payment of commission. The respondent did not maintain any books of account regarding the expenses incurred by them in respect of the agency business done by the respondent. In view of modified instructions issued by the Board contained in circular dated 6-6-1984, the respondent claimed deduction from the commission received by him from Life Insurance Corpn. of India to the extent of 50 per cent. The Assessing Officer accepted the claim and allowed the deduction of 50 per cent from the commission earned by the respondent-assessee. The Commissioner set aside the said order and restricted the said deduction to Rs. 10,000 only after interpreting the above-referred circular dated 6-6-1984. The Tribunal came to the conclusion that the assessee was entitled to get 50 per cent of the deduction out of the commission of Rs. 48,000 or 50 per cent of deduction up to Rs. 60,000. Being aggrieved by the order of the Tribunal, the Commissioner made an application to the Tribunal for referring certain questions to this Court u/s 256(1) of the income tax Act, 1961 (''the Act''). The Tribunal rejected the said application. The revenue has now made the present application u/s 256(2).
2. We have carefully gone through the above-referred circular issued by the Board. The said circular clearly provides that the expenditure may be allowed at the rate of 50 per cent of the year''s commission where the gross commission is less than Rs. 60,000. This circular has been correctly interpreted by the Tribunal and we see no infirmity in the view taken by the Tribunal. In the result, this application made on behalf of the revenue u/s 256(2) fails. The rule is discharged with costs.
