Judgment :- RATNAM J. In these tax case references under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue, the following questions of law have been referred to this court for its opinion "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the provision for monetary value of unavailed leave salary of the employees should be allowed as a deduction ? (common to all the years) 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 12, 171, being the arrears of urban land tax, is an admissible expenditure for the assessment year 1973-74 even though the tax related to the earlier years ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 2, 481, being the notice pay to workers voluntarily retired should be allowed as deduction for the assessment year 1973-74 ?" * (only in T. C. No. 1003 of 1980) In so far as the first question is concerned, learned counsel for the Revenue now represents that he has been instructed not to press for an answer on this question and we, therefore, refrain from answering the common question. In so far as the second question is concerned, in view of the decisions reported in CIT v. M. Ct. Muthiah 1979 (118) ITR 104, 1979 (13) CTR 274, 1979 (1) TAXMAN 280 , 1979 (13) CTR(Mad) 279 (Mad), CIT v. Woodlands Hotel 1981 (128) ITR 603 (Mad) and CIT v. East India Industries (M.) Pvt. Ltd. 1983 (139) ITR 1059, 1983 (33) CTR 103 (Mad), the question is answered in the affirmative and against the Revenue. The third question arises this way. The assessee is a limited company and, during the accounting year relevant to the assessment year 1973-74, it paid to nine workers, consequent on their voluntary retirement, a sum of Rs. 2, 481 representing notice pay. The Income-tax Officer treated this payment as a voluntary payment and, therefore, inadmissible as expenditure wholly and exclusively incurred for purposes of business. The Appellate Assistant Commissioner, however, took the view that though the payment of Rs. 2, 481 representing notice pay. The Income-tax Officer treated this payment as a voluntary payment and, therefore, inadmissible as expenditure wholly and exclusively incurred for purposes of business. The Appellate Assistant Commissioner, however, took the view that though the payment of Rs. 2, 481 was in the nature of a voluntary payment, it was made to maintain good relationship with the employees and upheld the claim of the assessee that the expenditure was an allowable item laid out wholly and exclusively for purposes of business. The Tribunal, in the course of its order, found that the assessee was finding it difficult to function owing to the sustaining of losses and with a view to reorganise the branch by reducing the staff, nine workers who had offered to voluntarily retire were paid notice pay as per standing orders and that the expenditure incurred by the assessee was incurred as part of business expediency and hence allowable as claimed by the assessee. That is how the third question referred to above has come up before usThere is no dispute that, during the accounting period relevant to the assessment year 1973-74, the assessee had sustained losses and had wanted, by reducing the staff, to bring a reorganisation of the branch, saving on the wage bill as well. Under the standing orders, provision is made for a voluntary retirement scheme and it is stated that, in all such cases of voluntary retirement, the quantum of benefits will be as for retrenchment as per the Industrial Disputes Act. Though voluntary retirement, under the provisions of the Industrial Disputes Act, cannot be regarded as retrenchment, yet, under the standing orders which are binding on the assessee as well as on the workers, a scheme has been evolved for voluntary retirement on benefits being made available to retiring workmen, as if they had been retrenched under the provisions of the Industrial Disputes Act. It is not disputed that, if the assessee had resorted to the procedure outlined in the Industrial Disputes Act for retrenching the nine workmen, then the assessee would have been liable to pay such benefits as would be available to the retrenched workmen as per the Industrial Disputes Act. It is not disputed that, if the assessee had resorted to the procedure outlined in the Industrial Disputes Act for retrenching the nine workmen, then the assessee would have been liable to pay such benefits as would be available to the retrenched workmen as per the Industrial Disputes Act. However, the assessee resorted to the voluntary retirement scheme, in and by which, though the retirement of the workmen may be voluntary, yet the benefits are available on a par with those under the Industrial Disputes Act. In other words, though under the provisions of the Industrial Disputes Act as such, no liability was cast on the assessee for making available the benefits of retrenchment to the nine retired workmen, yet, under the standing orders, it became necessary for the assessee to meet that obligation. The purpose of retrenching the nine workmen, as found by the Tribunal, was only to contain the loss, reorganise the branch by reducing the staff and to bring about a reduction in the wage bill as well. These are matters of management pertaining to business considerations and expediency and the expenditure incurred by the assessee in this regard was for purposes of business and also with a view to maintain good relationship with labour and the expenditure has to be considered as having been laid out wholly and exclusively for business purposes of the assessee. A reference in this connection may be made to Sassoon J. David and Co. P. Ltd. v. CIT 1979 (118) ITR 261, 1979 AIR(SC) 1441, 1978 (118) ITR 261, 1979 (3) SCC 524 , 1979 (3) SCR 878 , 1979 UJ 566 , 1979 (10) CTR 383, 1979 (1) TAXMAN 485, 1979 TaxLR 1078, 1979 (10) CTR(SC) 383 (SC), where the Supreme Court stated that it is too late in the day now to treat the expenditure incurred by a management in paying reasonable sums by way of compensation for termination of service as not business expenditure . It is also significant that it is not the stand of the Revenue that the sum of Rs. 2, 481 representing the payment of notice pay to the nine workmen is not reasonable. Therefore, the third question is answered in the affirmative and against the RevenueThere will be no order as to costs.