J.V.Gupta, J.

1. At the instance of the Revenue, the following two questions have been referred by the Income-tax Appellate Tribunal, Amritsar Bench (hereinafter called the "Tribunal"), under Section 256(1) of the I.T. Act, 1961, vide its order dated March 18, 1976 :

"1. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 83,691 by way payment of interest by the assessee to the Kapoor group, was an admissible deduction under Section 37 of the Income-tax Act, 1961 ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 50,044 was a notional receipt and hence was not liable to be assessed in the hands of the assessee during the assessment year 1970-71 ?"

2. The brief facts giving rise to these questions are these. The asses-see-firm known as M/s. N. D. Radha Kishan & Co., Pathankot, runs a fleet of passenger buses. This firm was formely constituted by two groups, namely, Kapoor group and Sethi group. A civil suit was filed by the Kapoor group in the High Court of Jammu and Kashmir against the Sethi group in the year 1968 for the rendition of accounts and dissolution of the firm.