The Tribunal erred in reversing the orders of the tax authorities without referring and dealing with the evidence relied upon by those authorities.

( 1 ) THESE two connected applications under Section 256 (2) of the Income-tax Act, 1961 (" the Act " for short), have been filed by the Revenue, praying for a mandamus directing the Income-tax appellate Tribunal, Allahabad Bench, to refer the questions set out below for the opinion of this court. These questions arise out of a consolidated order passed by the Income-tax Appellate tribunal, deciding two cross-appeals, one filed by the assessee and the other by the Revenue, in respect of the assessment year 1981-82. The questions referred to in these applications are similar and identical in nature and are to the following effect: " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in ignoring the fact that the assessee had not established the genuineness and nature of the payment and, as such, had failed to discharge the onus for deduction of the payment in computing the business income ?

( 2 ) WHETHER, on the facts and in the circumstances of the case, the Tribunal was correct in law in admitting the claim for payment of incentive bonus over and above the admissible bonus under the Payment of Bonus Act ?

( 3 ) WHETHER, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in stating that if a particular payment does not fall within the first proviso, it can still be considered under the second proviso to Section 36 (1) (ii) of the Actor even under section 37 (1) of the Act ?

( 4 ) WHETHER, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee is entitled to the deduction of the entire incentive bonus of Rs. 22,23,518?" 2. We have heard learned counsel for the parties and have also looked into the order of the income-tax Appellate Tribunal. All these four questions are concerned about the deductibility of rs. 22,23,518 which the assessee claimed as deduction in computing its taxable income. This amount is said to have been paid by the assessee to its workers and members of its staff and debited under the head "incentive Bonus". This payment was in addition to another amount of rs. 11,31,000 paid under the Payment of Bonus Act, 1965. 3. Taking questions Nos. 2, 3 and 4, the Departments claim is that the amount paid under the nomenclature " incentive bonus" (assuming genuineness of payment for arguments sake) is nothing but a bonus which is covered under the Payment of Bonus Act, 1965. It is claimed that the Tribunal fell into an error when it held that what was payable under the Bonus Act was customary bonus (or incentive bonus as described in the account books) and was, therefore, allowable under the second proviso to Section 36 (1) (ii) of the Act. In the alternative, it is claimed that before the disputed amount could have been allowed under the aforesaid provisions, it must be established to the satisfaction of the assessing officer that it is a reasonable payment when considered in the light of Clauses (a) to (c) of the second proviso. 4. It is apparent on a consideration of those provisions that such payments which are not warranted by the Bonus Act will be regarded as reasonable only when it is justifiable by reason of the pay of the employee and his conditions of service, the profits of the business or profession for the period in question and the general practice in similar business or profession.

( 5 ) THE grievance of the Department is that the aforesaid conditions are not satisfied in the instant case inasmuch as no material was furnished by the assessee before the Tribunal in that regard. The Tribunal has allowed the claim without objectively applying the tests laid down in Clauses (a) to (c) of the second proviso aforesaid and has allowed the claim of the assessee on its bare asking without furnishing the necessary materials in support of its claim.

( 6 ) ANOTHER contention was that there is no justification for the Tribunals vie