JAGADISAN J.

Under section 66(2) of the Indian Income-tax Act, this court directed the Income-tax Appellate Tribunal, Madras, to state the case raising the following question of law :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in disallowing the claim of the assessee that Rs. 21, 373 constituted an allowable sum of deduction in the year of account." *

The assessee is a manufacturer and dealer in safety matches owning a factory called "Pope The King Match Factory" at Kalugumalai, Tirunelveli District. Till the end of the year 1955 this factory was classified as "category No. 2" for purposes of levy of excise duty. During the year 1954, the assessee found that the production in the factory was higher than in the previous years, and that such production was likely to exceed 5 lakhs gross of match boxes, annual ceiling fixed for category No. 2 factory. This meant that the factory would have to be re-classified and treated as category No. 1. In the event of the factory being classified as category No. 1 the excise duty payable would also be more than that levied for category No. 2 factory. The assessee, therefore, submitted a petit