Gokal Chand Mital, J.

1. One question has been referred by the Income-tax Appellate Tribunal, Chandigarh, on the basis of Reference Application No. 117 filed by the assessee. Similar question was referred to this court in Income-tax Reference No. 99 of 1980 (Highway Cycle Industries Ltd. v. CIT [1989] 178 ITR 601 (P &, H)) and on November 15, 1988, we decided the question in favour of the Revenue. For the reasons recorded therein, we answer the question in favour of the Revenue, that is, in the affirmative.

2. The Revenue filed Reference Applications Nos. 15 and 16 and at its instance, three questions have been referred, which have been numbered as questions Nos. (1) to (3). At the instance of the assessee, a fourth question has been referred as cross-question to questions referred at the instance of the Revenue and has been numbered as question No. 4. We proceed to answer the questions, which are given below, seriatim.

3. Question with regard to R. A. No. 117 filed by the assessee :

"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the liability on account of surtax was not admissible as deduction for computing the ta