BEG, J. :- Two questions have been referred to us by the Income Tax Appellate Tribunal under section 66(1) of the Indian Income Tax Act (hereinafter referred to as the Act) by means of a consolidated order on three reference applications. The first of these questions relates to the assessment year 1950-51, and the same question had arisen out of the assessee's case for the assessment year 1949-50. This question has already been answered by this Court on 29-4-1966 in ITR No. 207 of 1962 (All), J. K. Cotton, Spinning and Weaving Mills Co. Ltd. v. Commr. of Income Tax, Lucknow.

2. The assessee is a private limited company, which had employed Sri H. P. Pasari in 1939 as the General Manager of its Mills. It had also employed Shri Madan Lal Singhania in 1936 as Printing Master in its Calico Department. There was no written contract of service between either of these two employees and the assessee. Both these employees were involved in a murder case and remained in jail as under-trial prisoners from 23-8-1948 to April 1950. They were both acquitted in 1950. In these circumstances, the question arose whether the amount paid towards their salaries and bonuses during the period for w