JUDGMENT A.R. Tiwari, J. 1. The Commissioner of Income-tax, Bhopal, has filed this reference application under Section 256(2) of the Income-tax Act, 1961, seeking direction to the Tribunal to state the case and refer the questions of law as proposed. The questions of law are extracted below : "1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that no remission or cessation of liability has occurred which could entitle the Income-tax Officer to tax the amount of Rs. 2,53,185 as income under Section 41(1) of the Income-tax Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the expiration of the period of limitation does not amount to remission or cessation of liability ?" 2. Briefly stated, the facts of the case are that the assessee (respondent) is the manufacturer of conductors, binding wire, armour tapes, aluminium, enamelled wire, etc. The assessee-company purchased aluminium from Hindustan Aluminium Corporation, Ranukot, U. P., which charged the assessee with Central sales tax at 4 per cent. The assessee, in its turn, supplied the goods to the MPEB, Jabalpur, under the agreement that any variation in the price inclusive of excise duty and sales tax will be the liability or benefit of the party implying thereby that the burden of increase as well the benefit of any decrease in the rate of sales tax will go to the MPEB. The Hindustan Aluminium Corporation challenged the rate of tax on the ground that the Central sales tax on the productions in question was leviable at 2 per cent. only. The Corporation eventually won the claim and granted the refund of Rs. 2,53,185 to the assessee, by issuing a credit note during the previous year of the accounting year, i.e., 1980-81. The Income-tax Officer included this amount in the assessee's income under Section 41(1) of the Income-tax Act, 1961 (for short "the Act"). The assessee challenged the character of the receipt and contended that it was the amount due to the MPEB and, therefore, could not be taxed in the assessee's hand. The Income-tax Officer included this amount in the assessee's income under Section 41(1) of the Income-tax Act, 1961 (for short "the Act"). The assessee challenged the character of the receipt and contended that it was the amount due to the MPEB and, therefore, could not be taxed in the assessee's hand. The Tribunal in Case No. ITA-295 of 1991 for the year 1980-81 held on December 29, 1981, that the assessee-company had no right or claim to the said amount which belonged to the MPEB and that the amount was not the income of the assessee in the year of account. The Tribunal, therefore, deleted the addition. The matter then came to this court under Section 256(2) of the Act at the instance of the Commissioner of Income-tax. This court rejected the reference on September 19, 1984, on the conclusion that it was a pure question of fact. In the year of assessment 1983-84, the Income-tax Officer again sought to tax the amount holding that the MPEB has not chosen to claim the amount even after the expiry of three years and the period of limitation for such a claim has also expired and, therefore, the assessee was liable to pay the tax as remission of liabilities under Section 41(1) of the Act. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who disagreed with the view of the assessing authority and held that the amount was taxable in the year of receipt, i.e., for the assessment year 1980-81. On this ground, he deleted the addition in the income of the assessment year 1983-84. The Department then preferred an appeal against the decision of the Commissioner of Income-tax (Appeals). The appeal was dismissed. The Department then filed an application under Section 256(1) of the Act. The reference application was rejected. The Department, therefore, filed this application before this court under Section 256(2) of the Act. 3. We have heard Shri D.D. Vyas, learned counsel for the Department and Shri G.M. Chaphekar, learned senior counsel with Shri Subhash Samvatsar for the assessee. 4. The attempt of the Department to augment the amount of income to the extent of refund of Rs. 2,53,185 of the assessment year 1980-81 did not succeed and this court refused to answer the reference on the ground that it was a finding of fact. 5. 4. The attempt of the Department to augment the amount of income to the extent of refund of Rs. 2,53,185 of the assessment year 1980-81 did not succeed and this court refused to answer the reference on the ground that it was a finding of fact. 5. As a subsequent event, the Department found that the MPEB had not claimed the money from the assessee within the period of limitation and, as such, that money became the income of the assessee and, therefore, sought to include it in the income for the assessment year 1983-84. Even this attempt failed. The Tribunal was, therefore, requested to refer the questions. The questions are as to the attractability of Section 41(1) of the Act and as to the question of limitation during which the MPEB was required to receive the amount from the assessee. 6. We are of the opinion that the questions as proposed are questions of law which are required to be referred. 7. We are thus not satisfied that the refusal was justified. We, therefore, require the Tribunal to state the case and refer the questions as noted above for the opinion of this court in terms of Section 256(2) of the Act. 8. A copy of this order shall be transmitted to the Tribunal under the seal of the court and the signature of the Registrar for compliance within six months from the receipt of the copy of the order. 9. This reference application is accordingly allowed, but without any orders as to costs. Counsel fee on each side shall be Rs. 700, if certified.