( 1 ) THIS is an IT Reference under Section 256 (1) of the IT Act in which the following questions have been referred to us for our opinion :

" (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a sum of Rs. 9,812 is not admissible deduction for the purpose of computing the total income of the assessee for the asst. yr. 1979-80? (ii) Whether, on the facts and circumstances of the case, the assessee is an "industrial company" under Section 2 (7) of the Finance Act, 1979 ?"

( 2 ) HEARD learned counsel for the parties. The relevant asst. yr, is 1979-80. The assessee is a private limited company which was incorporated on 6th Oct. , 1977. By a sale deed dt. 12th Nov. , 1977, the assessee took over the running business of M/s Jit and Pal X-Ray Bhuri Wave and Diagnostic Laboratory, which was being run under the sole proprietorship of Dr. Harnam Singh. The consideration fixed was Rs. 96,192 which is mentioned in the sale deed. The previous year for the asst. yr. 1979-80 ended on 31st july, 1978. In the deed of sale itself it was written that over and above the sum of Rs. 96,192 the company would be liable to pay to Mrs. Jagjit