S.C. GUPTE, J.

1. By this Reference under Section 256(1) of the Income Tax Act, 1961 (“Act”), the Income Tax Appellate Tribunal (“Tribunal”) has referred the following questions of law for our opinion:

“(a) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the limit of Rs.40,000/- laid down in Section 37(3A) of the Income Tax Act, 1961, could not be proportionately increased because the previous year relevant for the assessment year was seventeen months instead of twelve months?

(b) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the amount of Rs.28,983/- transferred out of Profit & Loss Account to Storage Fund for Molasses and Alcohol account to meet with the statutory requirements of Ethyl Alcohol (Price Control) Amendment Order, 1971, was not an admissible deduction in working out the business income?

(c) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the provisions of Section 40A(