M.R.Sharma, J.

1. The Sales Tax Tribunal, Punjab, Chandigarh, has referred the following two questions of law to us for our opinion :

(1) Whether, on the facts and circumstances of the case, the applicant was not entitled in law to claim deductions under Section 5(2)(a)(ii) of the Act with respect to M/s. Kapoor Weaving Factory, Amritsar, and M/s. Laxmi Trading Company, Amritsar, amounting to Rs. 4,01,690?

(2) Whether the considerations and factors relied upon by the Tribunal in rejecting the deductions of M/s. Kapoor Weaving Factory, Amritsar, and M/s. Laxmi Trading Company, Amritsar, are relevant in law for disallowing deductions claimed ?

2. The assessee is a registered dealer under the Punjab General Sales Tax Act as well as under the Central Sales Tax Act. On 8th December, 1969, the Assessing Authority framed the assessment for the year 1965-66 against the assessee. The assessee had claimed deductions under Section 5(2)(a)(ii) with respect to two firms, namely, M/s. Kapoor Weaving Factory, Amritsar, and M/s. Laxmi Trading Company, Amritsar, in respect of five transactions of sale aggregating to Rs. 2,80,531 in favour of M/s. Kapoor Weaving Factory, Amritsar, and one sa