( 1 ) BY two separate references, one for the asst. yr. 1976-77 which has been registered as IT Ref. No. 31 of 1982 and the other for the asst. yrs. 1977-78 and 1978-79 which has been registered as it Ref, No. 215 of 1983, the Tribunal has referred the following two common questions of law under Section 256 (1) of the IT Act (hereinafter referred to as the Act) for opinion to this Court :

"1. Whether, on the facts and circumstances of the case, the salary allowed to Yadav Kishan goel was adable under Section 40 (b) of the IT Act, 1961 ?" "2. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee is not entitled for the claim under Section 80hh of the IT Act, 1961 ?" following two more questions of law have been referred for the asst. yrs. 1977-78 and 1978-79 : "3. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the claim under Section 80j was rightly disallowed to the assessee ? "4. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee-firm, while running the cold storage plant, was neither manufacturing nor producing any article ?"

( 2 ) BRIEFLY stated the facts giving rise to the present references are as follows : the applicant had paid salary of Rs. 12,000 to its partner Sri Yadav Kishan Goel and the same was added back while computing the income of the applicant in terms of Section 40 (b) of the act. Shri Goel was partner in the applicants firm as a representative of the HUF being its Karta. The salary of Rs. 12,000 had been paid to him by the applicant for his services rendered by him in his individual capacity. Treating the salary as a payment to the partner, the ITO had disallowed the said amount while computing the income of the applicant under Section 40 (b) of the Act. In the appeal filed by the applicant before the CIT (A), the order of the ITO was upheld. The second appeal filed before the Tribunal has also been rejected. The applicant runs a cold storage at Moradabad and had claimed that it was an industrial undertaking in a backward area and since it had satisfied all the conditions laid down in Section 80hh (2) of the Act, it was entitled to the benefit of the aforesaid section. The ITO rejected its claim as according to him the applicant was not engaged in the manufacture of articles and hence the necessary conditions were not satisfied and therefore the claim cannot be allowed. In the appeal filed by the applicant, the CIT upheld the order of the assessing authority, which order has been confirmed in further appeal by the Tribunal. During the asst. yrs. 1977-78 and 1978-79 the applicants firm had constructed two separate cold storage chambers and claimed the benefit of Section 80j of the Act. The claim has been negatived by the authorities including the tribunal.

( 3 ) WE have heard Shri Vikram Gulati, learned counsel for the applicant and Sri A. N. Mahajan, learned standing counsel appearing for the Revenue.

( 4 ) THE learned counsel for the applicant submitted that Sri Yadav Kishan Goel was a partner in the applicant-firm representing his HUF. The salary which was paid to Sri Goel was not in his individual capacity but as Karta of the HUF and, therefore, the status of the two being different, it is an allowable deduction and, therefore, the provisions of Section 40 (b) of the Act are not attracted. He relied upon the following decisions :

(1) Dhirendra Mohan Gupta v. CIT, 1990 UPTC 1286 (2) Brij Mohan Das Laxman Das v. CIT, (1997) 223 ITR 825 (SC) (3) Suwalal Anandilal Jain v. CIT, (1997) 224 ITR 753 (SC) (4) CIT v. Trilok Nath Mehrotra and Ors. , (1998) 231 ITR 278 (SC ).

Shri A. N. Mahajan, learned counsel for the Revenue, submitted that even though Sri Goel was representing his HUF as a partner in the applicant-firm but the salary which was paid to him was on account of his individual contribution. The firm only recognises the individual as a part