1. The Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following question of law for our opinion:

"Whether, on the facts and circumstances of the case, the sum of Rs. 45,380 paid to L. Gurandittamal and L. Sahibdiyal, employees of the applicant firm, is permissible deduction in computing the business income of the applicant ? "

2. In order to answer the question, it is necessary to advert to the relevant facts. The assessee is a partnership firm. It holds the sole selling agency of Messrs. Oriental Carpet Manufacturers (India) Private Ltd. in respect of sale of yarn, cloth and blankets manufactured by the said company. The assessee was receiving commission as selling agent and over and above that commission, it started receiving overriding commission at 2 1/2 per cent, on the total sales effected. The overriding commission thus received by the assessee is as follows:

Assessment year

Amount received

1960-61

Rs. 35,964

1961-62

Rs. 61,818

1962-63

Rs. 83,922

1963-64

Rs.1,13,449

3. The turnover of the assessee increased from Rs. 39.99 lakhs during the year relevant to the assessment year 1962-63 to Rs. 54.28 lakhs during the year under consideration, name