1. This is a Reference under section 66 (1)of the Indian Income-tax Act. The assessee is a private limited company. It closes its account on the Rath Jatra day every year, and the accounting years in respect of the assessment years 1963-54 and 1954-55 were years ending on the 23rd June 1952 and the 12th July, 1953.

2. In the year ending upon June 23, 19152, the assessee's Profit and Loss Account disclosed a profit of Rs. 2,38,570/ -. In arriving at that profit, the following items of expenses were written off through the revenue accounts:

(1) Air-conditioning Rs . 2,69,000/-

(2) Furniture Rs . 1,65,000/-

(3) Electric lift Rs . 29,089/-

(4) Motor Car Rs . 18,413/-

(5) Sundry and other capital expenses. Rs . 30,015/-

Total Rs. 5,11,517/-

In returning the income to the Income-tax Officer, the assessee company added these amounts to the disclosed profit and returned an income of Rs. 12,75,466/ -.

In the accounting year ending upon July 12, 1953, the assessee's Profit and Loss Account disclosed a profit of Rs. 8,17,017/ -. This profit was arrived at by writing off certain expenses under the following heads:

(1) Furniture Rs. 22,7