D. K. Jain ( 1 ) BY this petition under Section 256 (2) of the Inicome-taxact, 1961 (for short the Act), the revenue seeks a direction to the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal) to state a case and refer the following questions, stated to be. questions of law and arising out of ITA No. 3272/del/85 pertaining to the assessment year 1977-78: "1. (a) Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that Sterling Apartment Flat, Cottage at Marve Malad and Jindal House could not be treated as guest houses and, as such, the expenses incurred thereupon were allowable? (b) Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that only 1/3rd portion of Maharani Bagh house was a guest house and remaining portion was for business purposes. 2. Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the premium of personal accident insurance policy in respect of the Managing Director could not be considered to be a perquisite within the meaning of sec. 40 (c) of the I. T. Act? 3. Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in directing the ITO to calculate the disallowance under Rule 6d with reference to the total journeys undertaken in a year and not with reference to each journey undertaken by an employee or Director on day-to-day basis? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the investment allowance of Rs. 3,72,700. 00 was wrongly disallowed by the ITO u/s 32a of the I. T. Act? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest u/s 216 was wrongly charged? 6. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 25% of expenses incurred under the head Public Relations Expenses should be considered towards employees and should be allowed accordingly? 7. 6. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 25% of expenses incurred under the head Public Relations Expenses should be considered towards employees and should be allowed accordingly? 7. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 25% of the expenses incurred under the head Business Promotion expenses should be considered towards employees and should be allowed accordingly? 8. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 25% of expenses incurred under the head boarding expenses should be considered towards employees and should be allowed accordingly?" ( 2 ) BRIEFLY stated, the material facts relevant to the controversy involved in question No. 1 (a) are that the assessee incurred certain expenses for the maintenance of: (i) Flat in Sterling Apartments in Bombay, (ii) Cottage at Marve Malad, Bombay and (in) Jindal House at Calcutta. During the course of assessment proceedings the Income-tax Officer took the view that these residential accommodations were in the nature of guest houses and, therefore, the expenses incurred on their maintenance were disallowable under Section 37 (4) of the Act, which prohibits allowance of any expenditure incurred by the assessee after 28 February 1970 on the maintenance of any residential accommodation in the nature of a guest house. The disallowance was upheld by the Commissioner of Income-tax (Appeals) primarily on the ground that no visitors register had been maintained at these places. On appeal by the assessee, the Tribunal, following its earlier orders in respect of assessment years 1972-73and 1976-77, came to the conclusion that all the three accommodations were not in the nature of guest houses and, therefore, the provisions of Section 37 (4) of the Act were not attracted. ( 3 ) IT is contended before us by learned counsel for the assessee that although for the assessment year 1972-73, on revenue s application u/s 256 (2) of the Act, reference was called by the Allahabad High Court on the question pertaining to the expenses incurred on the maintenance of flat in Sterling Apartments, Bombay but, for the subsequent years viz. , assessment years 1973-74 to 1976-77 no reference was sought by the revenue on this issue and, therefore, reference on the question may not be directed for the present assessment year as well. ( 4 ) FROM a bare reading of the Tribunal s order it is clear that while accepting assessee s view point, the Tribunal has merely relied on its earlier order for the assessmentyear 1972-73, which, we are told, is,the main order. Reference on a similar question in respect of assessment year 1972-73 having been called, we are of the view that the question involving the same controversy in the present assessment year also is fit for reference. ( 5 ) AS regards the expenses incurred on the maintenance of cottage at Marve Malad, Bombay and Jindal House, Calcutta, it is the admitted position that right from the assessment year 1972-73 to 1976-77 the Tribunal has consistently been accepting assessee s view point and in respect of all these years the revenue has either not sought a reference on this issue or the same has been declined by the High Court. Faced with the situation learned counsel for the revenue submits that each assessment year being independent, the rule of resjudicata does not apply to taxation proceedings and, therefore, there is no legal bar in calling for reference on this issue as well. The proposition adumbrated by learned counsel for the revenue is too broad and general. It is true that generally speaking, the rule of resjudicata does not apply to proceedings under the Act. like assessment or appellate proceedings under the Act because findings therein do not fulfil the two essential elements of res judicata, viz. , (i) the judex (a decision on question of law or fact by a Judge or judicial Tribunal) and (ii) a lis. However, the position is different in proceedings under Section 256 of the Act. Unlike various authorities under the Act, the High Court is a Court of Record. Before it, there is a lis between two parties: the assessee on the one hand and the revenue on the other. The Court dealing with a question of law or fact is a Court having power and authority of law to decide the issues. A decision by it is binding on the parties and the authorities under the Act. Before it, there is a lis between two parties: the assessee on the one hand and the revenue on the other. The Court dealing with a question of law or fact is a Court having power and authority of law to decide the issues. A decision by it is binding on the parties and the authorities under the Act. The rule of res judicata, or for a matter of that rule of constructive judicata in any case, would apply to the decision rendered by the High Court. In that view of the matter, we are of the opinion that the revenue cannot be permitted to rake up the present controversy over again. We, therefore, reject the revenue s request for reference on this issue. ( 6 ) IN so far as question No. l (b) is concerned, while framing assessment, the Income-tax Officer disallowed the expenses incurred by the, assessee on the maintenance, of a hired accommodation at A-1, Maharani Bagh, New Delhi on the ground that the said accommodation was also in the nature of a guest house. Dealing with the issue, the Tribunal has observed that even though the affidavits filed by the assessee in support of its claim that the building was used for holding business meetings and as a transit house, its user as a guest house could not altogether be ruled out. The Tribunal has accordingly estimated that 1 /3rd portion of the said building was used as a guest house and the remaining portion for the purpose of the business of the assessee. This conclusion of the Tribunal is a pure finding of fact which has not been challenged in the proposed question asbeing perverse, which finding of fact cannot otherwise be disturbed even on the ground that there is no evidence to support it. We cannot also accept the suggestion of counsel for the revenue. that the question may be reframed because it is beyond the jurisdiction of this Court in these proceedings to alter the basic frame of the question. We may also take note of the statement made at the Bar by learned counsel for the assessee that in respect of assessment years 1981 -82 and 1982-83, Tribunal s orders on the issue have been accepted by the revenue. In our opinion the question proposed is not a statable question of law. We may also take note of the statement made at the Bar by learned counsel for the assessee that in respect of assessment years 1981 -82 and 1982-83, Tribunal s orders on the issue have been accepted by the revenue. In our opinion the question proposed is not a statable question of law. ( 7 ) AS regards question No. 2 it is not disputed by Mr. Gupta, learned counsel for the revenue, that a similar controversy has been considered by this Court in C. I. T. v. Bharat Ram Charat Ram P. Ltd, (1986) 157 1tr 199 wherein it has been held that the insurance premium paid by a. company in respect of accident. insurance of its Directors is not a "perquisite" within the meaning of Section :1 7 (1) and this cannot be taken into account for the purpose of Section 40 (c) of the Act. It appears that against the said decision the revenue preferred a Special Leave Petition but-the same was dismissed (See: 186 ITR Statute 28 ). Having regard to this decision, in our opinion, the proposed question is not a statable question of law. ( 8 ) IN so far as question No. 3 is concerned, reference on a similar question having been called in the\case of the assessee itself in respect of the assessment year 1976-77 (C. I. T. v. Modipon Limited, (1991) 189 1tr 344), in our opinion reference ori,, the question posed has to be called. ( 9 ) COMING to question No. 4, the claim of the assessee for investment allowance under Section 32a of the Act was disallowed by the assessing officer on three grounds, viz. , (i) ,the plant and machinery on which the investment allowance had been claimed was not covered by Item No. 27 of the Ninth Schedule, (ii) no evidence was adduced to show that the machinery in question was new and (iii) no evidence was adduced to prove that the machinery was actually installed or first put to use during the relevant previous year. The CIT (Appeals) though held that the assessee was producing "organic Heavy Chemicals" falling in Entry 27 of the Ninth schedule but concurred with the assessing officer that the claim was to be. otherwise disallowed on grounds (ii) and (iii) above. The CIT (Appeals) though held that the assessee was producing "organic Heavy Chemicals" falling in Entry 27 of the Ninth schedule but concurred with the assessing officer that the claim was to be. otherwise disallowed on grounds (ii) and (iii) above. Although the revenue was not in appeal before the Tribunal against the finding of the CIT (Appeals) that the assessee was producing "organic heavy chemical", yet the Tribunal went on to re-examine the issue and did endorse the view taken by the CIT (Appeals ). We feel that the revenue having accept;. 1 the. order of the CIT (Appeals), it is too late in the day for it to re-agitate the issue as to whether the assessee is producing "organic heavy chemicals" or not, as has been attempted before us by learned counsel for the revenue. As regards the remaining two grounds on which the claim of the assessee was rejected, the Tribunal held as follows; "one of the grounds was that no evidence was produced by the assesses regarding the installation and user of the machinery in question. This has been found to be not correct. At the lime of original assessment, the ITO himself allowed depreciation on these machineries on tentative basis and subsequently modified his order u/s 154 to allow depreciation. Depreciation on plant and machinery u / s 32 is allowable with reference to ownership, installation and user of the machinery. When depreciation has been allowed by the assessing officer, the fact that the machinery was owned and installed and used by the assessee during the asstt. year 1976-77 is established. " ( 10 ) IT is evident. from the above extracted portion of the Tribunal s order that it has failed to address itself to the question as to whether the machinery on which investment allowance had been claimed by the assessee was a new machinery, which is one of the essential conditions for allowance of such a relief. In this view of the matter we are of the opinion that the proposed question is a question of law requiring consideration by this Court. In this view of the matter we are of the opinion that the proposed question is a question of law requiring consideration by this Court. ( 11 ) WITH regard to question No. 5, it could not be disputed by learned counsel for the assessee that identical facts involving the controversy contained in the question came up for consideration of this Court in C. I. T. v. J. K. Synthetics ltd, (1990) 181 ITR505wherein it was held that a question similar to the one raised in the present petition involved the interpretation of Section 216 of the Act to a given set of facts and thus giving rise to a question of law. In view of this decision, in our opinion, reference on the question has to be called. ( 12 ) IN so far as questions No. 6 to 8 are concerned, the controversy involved therein was subject matter of consideration before this Court in C. I. T. v. Expo Machinery Ltd. , (1991) 190 ITR 576. In that case the issue involved was regarding the estimation out of the composite expenditure incurred in hotels in entertaining the company s customers by the employees of the company and it was held that under these circumstances it was necessary to resort to an estimate in ascertaining that part of the expense incurred on food and beverages of the employees which is to be excluded from the purview of Section 37 (2a) of the Act and such an estimation by the Tribunal would be a question of fact. ( 13 ) BESIDES, it is pointed out by learned counsel for the assessee that no question in respect of any of the expenses involved in these questions was sought to be referred by the revenue from the orders of the Tribunal for the earlier years, which orders have been relied upon by the Tribunal while granting relief to the assessee in the present assessment year. It is also stated that from assessment year 1981 -82 onwards the assessing officer has been himself allowing similar expenses on approximate basis at 25% as pertaining to the employees. ( 14 ) HAVING regard to the aforesaid decision and the stated factual position, in our opinion, these questions do not give rise to statable questions of law. It is also stated that from assessment year 1981 -82 onwards the assessing officer has been himself allowing similar expenses on approximate basis at 25% as pertaining to the employees. ( 14 ) HAVING regard to the aforesaid decision and the stated factual position, in our opinion, these questions do not give rise to statable questions of law. ( 15 ) CONSEQUENTLY, we direct the Tribunal to refer questions No. l (a) (limited to the expenses incurred on the maintenance of flat in Sterling Apartments, Bombay) 3, 4 and 5 alongwith an appropriate statement of the case for the opinion of this Court. There will, however, be no order as to costs.