1. DIPAK KUMAR SEN, J. On an application of the Revenue under s. 256(1) of the IT Act, 1961, the Tribunal has referred the following questions, as questions of law, arising out of its order, for the opinion of this Court :

" 1. Whether, on the facts and in the circumstances of the case, and on a correct interpretation of s. 37(2B) of the IT Act, 1961, the Tribunal was correct in holding that the expenditure of Rs. 53,487 was an allowable expenditure in computing the profits and gains of the assessee's business ? 2.Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount of Rs. 48,440 representing 'difference' paid for non-fulfilment of contract for supply of flour and cement bags was an allowable deduction in computing the total income for the asst. yr. 1972-73 ? "

2. SO far as question No. 2 is concerned, the controversy raised therein is covered by the two decisions of this Court in CIT vs. Pioneer Trading Company (P) Ltd. (1968) 70 ITR 347 (Cal) and CIT vs. Ramjeewan Sarawgee and SOns (1977) 107 ITR 845 (Cal). The decision of this Court in Pioneer Trading Co. (P) Ltd. (supra) has been approved by the Supreme Court sub