Judgment :- 1. This is a reference by the Income-Tax Appellate Tribunal, Madras Bench, under S.66(2) of the Indian Income-tax Act, 1922. The assessment year concerned is 1958-59; and the accounting period, the twelve months ended on 31-12 -1957. The questions referred are: "(1) Whether on the facts and circumstances of the case, the assessee bank is not entitled to the deduction of bonus of Rs. 4,000/- paid to the ex-Managing Director under S.10 (2) (x) or (xv) of the Indian Income-tax Act, 1922? (2) Whether on the facts and in the circumstances of the case, the disallowance of the loss of Rs. 3,000/- on the sale of 10 year Treasury Savings Certificates as capital loss is valid in law?" 2. Question No. 1: S.10 (2) (x) of the Act has no application to the case at all. The allowance contemplated by that provision relates to any sum paid "to an employee" as bonus or commission. The payment in this case was not to an employee of the bank but to an ex-managing director. In the light of the decision of the Supreme Court in Gordon Woodroffe Leather Manufacturing Company v. Commissioner of Income Tax (1962) 44 I.T.R. 551, and of this Court in I.T.R. No. 14 of 1964 we must also hold that the amount paid to the ex-managing director will not constitute an admissible allowance under S.10(2)(xv) of the Act. 3. Question No. 2: The bank had invested Rs. 50,000/- in 31/2% Ten-year Treasury Savings Deposits. The expression "sale" used in the question is inaccurate. The 31/2% Treasury Savings Deposits were not saleable securities. What took place was not a sale but the obtaining of a repayment before the expiry of the ten calendar years from the date of deposit. Under the rules for such repayment what will be repaid is not the entire sum deposited but that sum after adjustment of a discount as prescribed in the rules. The Rs. 3,000/- represent the discount deducted from the amount deposited. In these circumstances, the Tribunal's conclusion that the Treasury Savings Certificates did not constitute the stock-in-trade of the assessee and that the loss should be considered as a capital loss seems to be justified. 4. In the light of what is stated above, we must answer both the questions referred against the assessee and in favour of the Department. In these circumstances, the Tribunal's conclusion that the Treasury Savings Certificates did not constitute the stock-in-trade of the assessee and that the loss should be considered as a capital loss seems to be justified. 4. In the light of what is stated above, we must answer both the questions referred against the assessee and in favour of the Department. We do so; but in the circumstances of the case without any order as to costs. 5. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by subsection (5) of S.66 of the Indian Income-tax Act, 1922.