P.V. Dixit, C.J.

"In this reference under section 66(1) of the Income-tax Act at the instance of the assessee, the questions referred to this Court arise out of the assessment for the year 1950-51, the previous year in relation to which is the calendar year 1949. The assessee is a limited company owning and running a textile mill at Indore. During the year of account, the company paid Rs. 1,08,325-9-3 as bonus to its workers for the calendar year 1947. The award under which the bonus became payable to the employees was made on 13th January 1949 under the Industrial Disputes Act. This amount was debited by the company in its profits and losses account for the year 1948. The assesses did not close its books of account for 1948 till the date of the making of the order by the Industrial Tribunal on 13th January 1949. In the assessment year in question, the assessee claimed a deduction under section 10(2)(x) of the Act on account of the bonus amount paid to its employees for the year 1947. The Income-Tax Officer disallowed the claim holding that in regard to bonus the assessee maintained its accounts on the mercantile basis and not on the cash basis and that, therefore, the bonus th