BANERJEE, J.

1. THIS is a reference under s. 27(1) of the WT Act, 1957, made in circumstances hereinafter stated. The assessee is a public limited company, doing business in manufacture of textile machinery. The assessment years in question are 1957-58, 1958-59 and 1959-60, the material valuation dates being 31st Dec., 1956, 31st Dec., 1957, and 31st Dec., 1958. There is no dispute that the accounts of the business, carried on by the assessee, are regularly maintained on mercantile basis.

2. AS is now the common feature with most of the manufacturing concerns, the employees of the assessee-company were carrying on an industrial dispute with the assessee, concerning payment of bonus. This dispute is not of recent origin. In the year 1955, the employees made a claim for bonus and carried the matter before an Industrial Tribunal, which made an award of Rs. 5,65,000 in favour of the employees. This award was implemented in the year 1956. For similar claims concerning the years 1956, 1957 and 1958, there were disputes pending before Industrial Tribunals but as late as the year 1961, the Tribunals did not make any award. Be that as it may, the assessee seems to have learnt a less