P. N. BHAGWATI, J. M. SHELAT, J.

( 1 ) THIS Reference relates to the assessment years 19551956 1956 and 1957-1958 of which the relevant previous years are the calendar years 1954 1955 and 1956. Two questions arise in this Reference. The first question is common to all the three assessment years and relates to certain unclaimed wages and the second question relates only to the assessment years 1956-1957 and 1957-1958 and is as regards certain deductions claimed by the assessee company in regard to expenses incurred in connection with tours abroad by two of the directors of the assessee company who were also the partners in the managing agency firm and an employee of the company.

( 2 ) THE assessee company is a public limited company and carries on business of manufacturing textiles. It maintains accounts according to the mercantile system. The expenses for wages to the employees engaged for carrying on the business of the company were shown in the accounts as liabilities as and when they accrued. In other words irrespective of the payment of the wages the assessee company used to take into account the wages due to the employees and labourers and the entire sum so due was shown as a d

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