THANIKKACHALAM, J.

In pursuance of the direction given by this Court the Tribunal referred the following question for the opinion of this Court under s. 256(2) of the IT Act, 1961, hereinafter referred to as the Act :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law and was justified in deleting the sum of Rs. 35, 277 sustained by the AAC for 1975-76 assessment ?"

2. The assessee is a company carrying on business in the purchase and sale of commodities including steel. Whenever an order is booked for steel the assessee usually takes an amount as advance, which is slightly in excess of the price of the steel at that time. While supplying the steel this amount is adjusted towards the sale price and the balance, if any, refunded to the concerned party. In most of the cases after the concerned party takes delivery of the steel they never ask for the balance amount and this unclaimed amount remains with the assessee. In the previous year 1975-76 the assessee credited its P&L a/c with such amounts aggregating to Rs. 35, 277. However, while filing the return of the income for the asst. yr. 1975-76, the assessee claimed that the amount sho