JUDGMENT

Bharucha, J.-We are concerned in these appeals, from a decision of a Division Bench of the High Court of Kerala, with the Assessment Year 1972-73, the previous year of which ended for the assessee on 30th September, 1971. The question that was referred to the High Court and which it answered in the negative and against the assessee reads thus:

"Whether on the facts and in the circumstances of the case, the assessee is entitled to claim deduction of Rs. 4,18,107/- under Section 37 of the Income-tax Act?"

2. The assessee, an individual, carried on the business of processing cashew nuts in ten units. Four of these units were situated in Kerala. Of these four units, two were owned by the assessee and two were taken on lease. In October, 1969, the assessee faced labour problems in Kerala, consequent upon which he ordered a lock-out of the four units there. On 9th March, 1970, the assessee leased out the two units which he owned in Kerala to a private limited company whose only two shareholders were the assessee and his wife. The agreement in this behalf provided that the workmen employed in the two units would have continuity of service. At about the same time the lessee surrendered the two units in Kerala which he had taken on lease. On 21st November, 1970, the assessee entered into a settlement with the trade unions representing the workmen of the units in Kerala and agreed to pay them for the periods of their service upto the date of the lock-out five days wages for each year of service. An aggregate payment of Rs. 4,18,107/- was made in this behalf.

3. The payment having been made in the course of the previous year relevant to the Assessment Year 1972-73, the assessee made a claim for the deduction of the said sum of Rs. 4,18,107/- under Section 37 of the Income Tax Act, 1961. The Income Tax Officer disallowed the claim. In appeal, the claim was allowed. The Tribunal upheld the decision in appeal. From out of the order of the Tribunal, the question afore-stated was referred to the High Court. The High Court, by the judgment and order under appeal, answered the question against the assessee. The assessee is here by special leave.

4. It needs to be noted that the Revenue had sought the reference of six questions. The Tribunal had disallowed its application insofar as it related to five questions on the basis that the one issue, that was covered by the question quoted above, had been split up into six questions. The Revenue did not file an application before the High Court under Section 256(2) seeking the reference of the rejected five questions. It is necessary to make a point of this because none of the six questions proceeded upon the basis that the Revenue considered the decision of the Tribunal on facts to be perverse; in other words, that it could not reasonably have been arrived at on the materials placed before the Tribunal. Alternatively, assuming that one or more of the questions did proceed upon that basis, the Revenue accepted the fact that they were not referred and did not carry the matter to the High Court. There was, therefore, no challenge by the Revenue to the facts found by the Tribunal before the High Court.

5. As we read the judgment of the Tribunal, it extensively analysed the documents placed before it and came to the conclusion that the ten units run by the assessee constituted a single business, that the four units in Kerala did not constitute a separate business and that, therefore, the payment that was made was not on account of closure of business, which would not be allowable under Section 37. The Tribunal found, on the basis of the accounts placed before it, that only one set of accounts were maintained for all the ten units. It found that there was one central financing system, that all the units were financed by banks and that these accounts were operated from the head office and that the cashew was purchased for processing by the head office for all the units together. It was a