Judgment :- K. A. THANIKKACHALAM, J. At the instance of the Department, the Tribunal referred the following two questions for the assessment years 1973-74 and 1974-75 for the opinion of this court under section 256(2) of the Income-tax Act, 1961 For both the assessment years: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to depreciation on the assets transferred by the Government to the assessee even though the assessee is not the legal owner of the property? " For the assessment year 1974-75 " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 7, 76, 205 being the contribution to the insurance fund is admissible deduction?" * The assessee is a State Government undertaking engaged in providing passenger transport. The Income-tax Officer while completing the assessments for the assessment years 1973-74 and 1974-75 disallowed the claim for depreciation to the extent of Rs. 4, 44, 360 for the assessment year 1973-74 and Rs. 6, 65, 599 for the assessment year 1974-75. According to the assessee, it became the owner of those properties as per G. O. No. 86, Transport Department, dated November 8, 1971, and notification dated December 22, 1971. The latter notification vested those properties with the assessee and suitable entries were made in the assessee's books in respect of the consideration from capital contribution and loan advanced by the Government. A formal sale deed was not executed in view of the provisions under the Government Grants Act, 1895. The Income-tax Officer was of the view that the assessee had not become a legal owner and that the provisions of the Transfer of Property Act and the Indian Registration Act disqualify the assessee's claim for ownership over these properties. The Appellate Assistant Commissioner deleted the disallowance and directed the allowance of depreciation following the decision of the Tribunal in Tamil Nadu Small Scale Industries Development Corporation Ltd. in ITA No. 1692/Mds of 1976-77 dated March 29, 1978. The Appellate Assistant Commissioner deleted the disallowance and directed the allowance of depreciation following the decision of the Tribunal in Tamil Nadu Small Scale Industries Development Corporation Ltd. in ITA No. 1692/Mds of 1976-77 dated March 29, 1978. On appeal, considering the provisions contained in section 2 of the Government Grants Act and section 53A of the Transfer of Property Act and the provisions of section 32 of the Income-tax Act, 1961, the Tribunal confirmed the order passed by the Appellate Assistant Commissioner in accepting the assessee as the owner of the properties in question and in granting allowance of depreciation. A similar question came up for consideration before this court in CIT v. Tamil Nadu Small Industries Development Corporation Ltd. 1991 (190) ITR 655, 1991 (91) CTR 32 wherein this court held that : "section 2 of the Government Grants Act, 1895 * . The order passed by the Tribunal on this aspect is in accordance with the judgment of this court cited supra. Accordingly, we answer question No. 1 referred to us in the affirmative and against the DepartmentQuestion No. 2 relates to contribution to insurance fund. The assessee contributed in the assessment year 1974-75 a sum of Rs. 7, 76, 205 as contribution to the insurance fund. The assessee contended that the payment was in terms of the statutory provisions of the Motor Vehicles Act, 1939, and that it should be allowed as a deduction. According to the Income-tax Officer, it represents only a contingent liability and he allowed only a sum of Rs. 3, 095 out of the total provision of Rs. 7, 79, 300 on the ground that only this amount of Rs. 3, 095 representing actual payment towards the insurance fund is allowable as a deduction. He disallowed the balance of Rs. 7, 76, 205. On appeal, the Appellate Assistant Commissioner deleted this disallowance on the ground that the insurance fund in terms of section 94(3) of the Motor Vehicles Act, 1939, mandatorily requires either insurance to meet liabilities of the employees and third parties or maintenance of a fund for this purpose. The assessee had already constituted such a fund in the name of Pallavan Transport Corporation Insurance Fund Regulations, 1972. The fund meets the requirements of the Motor Vehicles Act. The assessee had already constituted such a fund in the name of Pallavan Transport Corporation Insurance Fund Regulations, 1972. The fund meets the requirements of the Motor Vehicles Act. The amount set apart during the year has also been funded by putting it in the bank in the immediately succeeding year as seen from the accounts for the year ending March 31, 1974. On these facts, the Appellate Assistant Commissioner found that it was not a mere contingent liability but a provision towards the fund already in existence. On further appeal by the Department, the Tribunal agreed with the conclusion arrived at by the Appellate Assistant Commissioner. Accordingly, the Tribunal confirmed the finding of the first appellate authority on this aspect Before us, learned standing counsel for the Department submitted that the fund created by the assessee is only a reserve created for meeting the contingent liability. The assessee is the owner of the fund. The interest arising out of the fund is payable to the assessee. Learned standing counsel submitted that the amount deposited in the fund should be held on behalf of the assessee-Corporation. It was further pointed out that no separate accounts were maintained by the fund. It is only in the books of account of the assessee-Corporation, the fund accounts are maintained. Therefore, according to learned standing counsel, the fund created by the assessee is owned by it. Learned standing counsel further submitted that though the ownership of the fund is with the assessee, the user is restricted only for the purpose of payment of compensation in case any accident takes place. He pointed out that if the liability actually accrued that was deducted in the year in which the payment was made. Therefore, according to learned standing counsel, inasmuch as the ownership of the fund is with the assessee and the liability is only contingent, the amount contributed by the assessee to the fund cannot be deducted as revenue expenditure. It was further pointed out that the amount contributed to the fund was not incurred for the purpose of the business of the assessee-company. According to learned standing counsel, even though the fund was created to fulfil the obligation placed upon the assessee under the Motor Vehicles Act, inasmuch as the liability is only a contingent liability, the amount contributed to the fund cannot be allowed as revenue expenditure. According to learned standing counsel, even though the fund was created to fulfil the obligation placed upon the assessee under the Motor Vehicles Act, inasmuch as the liability is only a contingent liability, the amount contributed to the fund cannot be allowed as revenue expenditure. For these reasons, it was submitted that the Tribunal was not correct in considering the contribution made to the fund as revenue expenditure and, therefore, allowable as a deductionOn the other hand, learned counsel appearing for the assessee submitted that the assessee had set up the insurance fund in terms of the statutory provisions of the Motor Vehicles Act. The terms of section 94(3)(c) are alternate to section 94(1) of the Motor Vehicles Act and without such provision for insurance under section 94(1) or under section 94(3) the motor vehicles licensing authority would not accept payment of the motor vehicles tax and the vehicles should not be used. Therefore, the assessee claimed that it is a proper deduction either under section 36(1)(i) or under section 37(1) of the Act. The insurance fund set up by the assessee and the payments made into it are governed by the statutory regulations and, therefore, it is a statutory liability. The actual payment out of the fund might be contingent on the happening of certain events but the liability for the appellant is created by the statute and not by the events themselves. Therefore, the payments towards the insurance fund are an admissible deduction. The assessee is not resting its claim on the principle of diversion by overriding title. Learned counsel further submitted that if the insurance premium is paid that would be allowable as revenue expenditure. In similar manner, the fund was created and the amount was contributed and that should also be allowed as a deduction since it is a revenue expenditure We have heard learned standing counsel for the Department and learned counsel for the assessee In M. S. P. Senthilkumara Nadar and Sons v. CIT 1957 (32) ITR 138 this court held that : "it should be taken as well settled now that without statutory warrant---and there is none in section 10(2)(xv)--- deductions are not permissible for anticipated losses, even if they are inevitable---nor for contingent liabilities" * In Indian Molasses Co. (Pvt.) Ltd. v. CIT 1959 AIR(SC) 1049, 1959 (37) ITR 66, 1959 (S2) SCR 964 the Supreme Court while considering the provisions of section 10(2)(xv) and section 66 of the Indian Income-tax Act, 1922, held that : "'spending' in the sense of 'paying out or away' of money is the primary meaning of 'expenditure'. 'Expenditure' is what is paid out or away and is something which is gone irretrievably. Expenditure, which is deductible for income-tax purposes, is one which is towards a liability actually existing at the time, but the putting aside of money which may become expenditure on the happening of an event is not expenditure ". It was further held that," the income-tax law makes a distinction between an actual liability in praesenti and a liability de futuro which, for the time being, is only contingent. The former is deductible but not the latter" * In Tarachand Ghanshyamdas v. CIT 1966 (59) ITR 378 this court while considering the provisions of section 10(1) and section 10(2)(xv) of the Indian Income-tax Act, 1922, held that : "the assessee was not entitled to claim the sum of Rs. 75, 000 paid to S as a deduction under section 10(1) or section 10(2)(xv) of the Indian Income-tax Act, 1922. The sum of Rs. 75, 000 paid to S. by the assessee could not be called an expenditure, as the assessee did not pay the amount of any accrued liability, but only paid it towards a contingent liability which might arise in the future or might not. The income-tax law does not allow as expenses all the deductions a prudent trader would make in computing his profits". In Chandmama Publications v. CIT 1989 (176) ITR 321, 1989 (76) CTR 97, 1989 (43) TAXMAN 147 , 1989 (76) CTR(Mad) 97 this court while considering the provisions of section 37 of the Income-tax Act, 1961, held that : "as the payment of an insurance premium is a definite outgoing though the payment is to cover the contingency of an insurable interest, the analogy of the payment of insurance premium to the provision of retrenchment compensation will also be inappropriate. As the liability to pay retrenchment compensation is only in the nature of a contingent liability and there is no satisfactory method of evaluating or quantifying the value of that liability in any particular year of account, the provision therefor cannot properly form the subject-matter of a claim for deduction as business expenditure under the Income-tax Act, 1961". In Vellore Electric Corporation Ltd. v. CIT 1977 (109) ITR 454, 1977 TaxLR 1415, 1977 CTR(Mad) 380 (Mad) while considering the compulsory appropriation out of profits to contingencies reserves and development reserve under the Electricity (Supply) Act, 1948, this court held that : "the amounts standing to the credit of the two reserves cannot be said to be amounts which have gone out of the hands or the control of the assessee and become the subject-matter of ownership of somebody else. It may be the statute has imposed certain restrictions over the disposal of the amounts by the assessee but that does not mean that the amounts have ceased to be money belonging to the assessee. Simply because the statute requires a licensee like the assessee to make an appropriation out of its revenue for a particular purpose and that is a compulsory appropriation which the assessee has to make, it does not follow that for income-tax purposes, such appropriation must necessarily be deducted in arriving at the profits and gains of the business. Every appropriation to be made under a statutory provision does not constitute a diversion of profit by overriding title." In CIT v. Sijua (Jharriah) Electric Supply Co. Ltd. 1984 (145) ITR 740 , 1983 TaxLR 1524, 1983 (37) CTR(Cal) 319 the Calcutta High Court while considering the amount appropriated towards "reserve for contingencies" under the Electricity Supply Act held that : "if an assessee sets apart a sum of money every year for meeting its unknown liabilities in business, it cannot be said that the sum so set apart has been diverted at source by an overriding title. Similarly, if a sum is set apart under a compulsion of law for meeting unknown business needs of the company a diversion of income at source by an overriding title does not take place." In CIT v. South, Arcot District Co-operative Supply and Marketing Society Ltd. 1981 (127) ITR 467 this court while considering the statutory contribution of a portion of its profits to an education fund held that : "merely because the statute contemplates the creation of a particular fund and its utilisation in a particular manner, it does not mean that there is any diversion by overriding title as such. Section 62 and rule 46 dealt with what could or should be done after the profits are earned and have reached the assessee, and not with any profits before they accrued to it. The amount set apart is not also any expenditure to earn the profits. Accordingly, the contribution to the education fund cannot be allowed as a deduction in computing the assessable income" * In Vazir Sultan Tobacco v. CIT 1981 AIR(SC) 2105, 1981 (132) ITR 559, 1981 (3) Scale 1483 , 1981 (4) SCC 435 , 1982 (1) SCR 789 , 1981 TaxLR 1780, 1981 SCC(Tax) 342, 1981 (25) CTR 186, 1981 (25) CTR(SC) 186 the Supreme Court while considering the meaning attributable to "reserves" and "provision" assigned in the Companies Act, 1956, in relation to the Surtax Act, 1964, held that : "the expression 'reserve' has not been defined in the Super Profits Tax Act, 1963, or the Companies (Profits) Surtax Act, 1964. The dictionaries do not make any distinction between the two concepts 'reserve' and 'provision' while giving their primary meanings, whereas in the context of those Acts a clear distinction between the two is implied. Though the expression 'reserve' is not defined, since it occurs in taxing statutes applicable to companies only and to no other assessable entities, the expression has to be understood in its popular sense, that is to say, the sense or meaning that is attributed to it by men of business, trade and commerce and by persons interested in or dealing with companies. Therefore, the meanings attached to the words 'reserves' and 'provisions' in the Companies Act, 1956, dealing with the preparation of the balance-sheet and the profit and loss account would govern their construction for the purposes of the two enactments. Therefore, the meanings attached to the words 'reserves' and 'provisions' in the Companies Act, 1956, dealing with the preparation of the balance-sheet and the profit and loss account would govern their construction for the purposes of the two enactments. The broad distinction between the two is that whereas a 'provision' is a charge against the profits to be taken into account against gross receipts in the profit and loss account, a 'reserve' is an appropriation of profits, the asset or assets by which it is represented being retained to form part of the capital employed in the business" * The above said decisions are relied upon by learned standing counsel for the Department to support the contention that the assessee has created only a reserve to meet the contingent liabilities and, therefore, the contribution made to the Pallavan Transport Corporation. The insurance fund cannot be allowed as deduction as revenue expenditure since it does not also relate to earning of profitsOn the other hand, learned counsel appearing for the assessee submitted that in order to meet the statutory liability the assessee created the insurance fund for the purpose of meeting the payment of compensation that may arise in future, and, therefore, it is an outgoing since the contribution went out of its hands and it should be allowed as deduction. Reliance was placed upon the decision of this court rendered in Chandmama Publications v. CIT 1989 (176) ITR 321, 1989 (76) CTR 97, 1989 (43) TAXMAN 147 , 1989 (76) CTR(Mad) 97 wherein this court held that : "the object of effecting insurance is generally to cover an insurable interest subject to a risk, which may or may not take place. To that extent, the risk may be contingent. Even so, the payment of insurance premium to cover such a contingent risk or an insurable interest is a definite outgoing. In other words, to cover a possible risk, there is a present expenditure, which is not present when a mere provision is made for such a contingency which may or may not arise in future" * . Even so, the payment of insurance premium to cover such a contingent risk or an insurable interest is a definite outgoing. In other words, to cover a possible risk, there is a present expenditure, which is not present when a mere provision is made for such a contingency which may or may not arise in future" * . Therefore, this decision cited by learned counsel for the assessee in order to support his contention that the contribution to the Pallavan Transport Corporation Fund should be equated to the payment of premium for insurance cannot be accepted Reliance was placed upon a decision of the Bombay High Court in CIT v. Bombay State Road Transport Corporation, 1977 (106) ITR 303 wherein it was held that : "under this statutory rule, which has been framed by the State Government under section 44 of the Road Transport Corporations Act, a legal obligation has been cast upon the assessee-Corporation to establish and maintain a fund called third party liability fund. The rule also provides that the assessee-Corporation shall pay into this fund every year from and out of the revenues of the Corporation such sum as may be directed by the State Government from time to time for meeting any liability arising out of the use of any vehicle of the Corporation. It was not disputed before us that it was in pursuance of this statutory obligation that was cast upon the assessee-Corporation that the four amounts in question had been contributed by the assessee to the insurance fund which comprised one of the items, viz., third party risk. Even in the accounts prepared by the assessee-Corporation for the aforesaid relevant years these amounts were shown as having been contributed to the insurance fund in relation to the third party risk. It is obvious that any amount due from the Corporation in respect of any claim arising out of accidents by or to the vehicles of the Corporation was required to be paid out of this fund and, in our view, since the contributions were made under a statutory obligation cast upon the assessee-Corporation under the statutory rule the same will have to be allowed as a deduction in computing its profits. There is also an additional factor which may be mentioned in this behalf. There is also an additional factor which may be mentioned in this behalf. Under rule 11, the assessee-Corporation is called upon to make such contributions to the insurance fund for the purpose of covering third party risk 'from and out of the revenues of the Corporation' and, that being the position under the relevant rule, it is difficult to appreciate how the Appellate Assistant Commissioner took the view that these amounts were in the nature of debits to the insurance fund by way of appropriation of profits after they had been earned. The Tribunal, in our view, was, therefore, right in allowing the deduction claimed by the assessee-Corporation in respect of these contributions" * In Amalgamated Electricity Co. Ltd. v. CIT 1974 (97) ITR 334 the Bombay High Court while considering the provisions of section 10(1) of the Indian Income-tax Act, 1922, and rule 8 of the Indian Income-tax Rules, 1922, held that : "the contingency reserve and the tariffs and dividends control reserve are required to be compulsorily made under the Electricity (Supply) Act, 1948. Appropriations to both these funds are not made voluntarily by the licensee. The reserves are not available to the licensee for any purpose of its own. The tariffs and dividends control reserve is apparently intended to be used for the benefit of the licensee or its shareholders but, in the ultimate analysis, the real purpose behind the creation of the reserve is to see that the tariffs leviable on the consumers in the relevant years are not increased or enhanced. On the purchase of the undertakings the reserves are required to be handed over to the transferee and the transferee is required to maintain them as such and when the undertaking is purchased by the Board or the State Government no allowance is made in respect of the reserves while determining the price payable by the Board or the State Government. Having regard to these aspects of the reserves, it is clear that amounts credited to these reserves in the accounting years have to be deducted under section 10(1) of the Indian Income-tax Act, 1922, in computing the profits of electricity undertakings." In the abovesaid decision, the Bombay High Court applied the principle enunciated in the decision in Poona Electric Supply Co's case 1966 AIR(SC) 30, 1965 (57) ITR 521, 1965 (3) SCR 818 , 1965 (57) ITR(E) 521 (SC). In CIT v. New India Sugar Mills Ltd. 1994 (206) ITR 212 , 1992 (107) CTR 280, 1993 (68) TAXMAN 356, 1992 (107) CTR(Cal) 280 the Calcutta High Court had an occasion to consider whether contribution made to the Molasses Storage Reserve Fund under compulsion of law is capital or revenue expenditure and held that : "there was no finding by the Tribunal that the assessee had gained any advantage of enduring nature or acquired any capital asset as a result of the contribution made under compulsion of law. The contribution made by the assessee and the other sugar mill owners might be utilised for creating storage facilities. But the result of the expenditure would not augment or improve the capital structure of the assessee-company. The contribution to the Molasses Storage Reserve Fund created under the Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974, was revenue expenditure." Following this decision, the Calcutta High Court in CIT v. Upper Ganges Sugar Mills Ltd. 1994 (206) ITR 215 , 1993 (114) CTR 375, 1994 (72) TAXMAN 37, 1993 (114) CTR(Cal) 375 held that the contribution to Molasses Storage and Maintenance Reserve created under the Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974, is revenue expenditureThe Supreme Court in Associated Power Co. Ltd. v. CIT 1996 (7) SCC 221 , 1996 AIR(SC) 894, 1995 (6) Scale 702 , 1996 (1) AD(SC) 174, 1995 (9) JT 146 , 1996 (218) ITR 195, 1996 (130) CTR 393, 1996 (84) TAXMAN 355, 1996 (130) CTR(SC) 393 while considering the provisions of the Electricity (Supply) Act, 1948, and Clause II of the Sixth Schedule thereto held that : "Clause II of the Sixth Schedule to the Electricity (Supply) Act, 1948, requires the electricity company to create certain reserves if its clear profit exceeds a reasonable return. Monies standing to the credit of the contingencies reserve which are set apart to be utilised by the electricity company for the purposes set out in clause V of the Sixth Schedule are to meet expenses or recoup loss of profits arising out of accidents, strikes or other circumstances which the electricity company could not have prevented; to meet expenses on replacement or renewal of plant or works; and for payment of compensation required by law for which no other provision has been made. These are all expenses which the electricity company has to incur. These are all expenses which the electricity company has to incur. The reservation is made so that money is always available for meeting these expenses and the supply of electricity is not interrupted. For the same reason, payments out of the contingencies reserve can be made only with the State Government's approval. It is particularly noteworthy that the electricity company can make good from out of the contingencies reserve even a loss of profit arising out of strikes, accidents and other circumstances over which it has no control. There can be no doubt, in the circumstances, that the monies in the contingencies reserve belong to the electricity company, and are not diverted away from it. It is the electricity company which has to invest the sums appropriated to the contingencies reserve. The investment would be in its name and it would be the owner thereof. The restriction that the investment can be made only in securities mentioned in the Indian Trusts Act makes no difference to this position. The fact that on the purchase of the undertaking the contingencies reserve has to be handed over to the purchaser and maintained as such is only to make explicit the obvious, for the reserve is for the purposes of the undertaking that is being transferred. There is nothing in the statute to suggest that the amount standing to its credit cannot be taken into consideration in arriving at the purchase price. For the purposes of sale to a State Board or Government a different statute lays down how the price is to be fixed. The amount credited to the contingencies reserve is not diverted by reason of an overriding obligation or title and, in determining the business profits of the assessee, it must be taken into account." In the abovesaid decision, the Supreme Court approved the decision of the Madras High Court in Vellore Electric Corporation Ltd. v. CIT 1977 (109) ITR 454, 1977 TaxLR 1415, 1977 CTR(Mad) 380. The Supreme Court overruled the decisions in Cochin State Power and Light Corporation Ltd. v. CIT 1974 (93) ITR 582, 1973 TaxLR 1402 (Ker) and Amalgamated Electricity Co. Ltd. v. CIT 1974 (97) ITR 334 (Bom). The Supreme Court distinguished the decision in Poona Electric Supply Co. The Supreme Court overruled the decisions in Cochin State Power and Light Corporation Ltd. v. CIT 1974 (93) ITR 582, 1973 TaxLR 1402 (Ker) and Amalgamated Electricity Co. Ltd. v. CIT 1974 (97) ITR 334 (Bom). The Supreme Court distinguished the decision in Poona Electric Supply Co. Ltd. v. CIT 1966 AIR(SC) 30, 1965 (57) ITR 521, 1965 (3) SCR 818 , 1965 (57) ITR(E) 521 (SC)According to the facts arising in this case, in order to fulfil the statutory obligation cast upon the assessee under section 94(3) of the Motor Vehicles Act, it created a fund called Pallavan Transport Corporation Insurance Fund Regulations, 1972. This fund was created in accordance with G.O. Ms. No. 86, Transport Department, dated November 8, 1971, and Notification dated February 22, 1971. The fund should be used only for making payments to third parties either on death or bodily injury arising out of the vehicle owned by the company, damage to properties caused by the use of the vehicle and any liability arising under the Workmen's Compensation Act. The amount reckoned at Rs. 100 per annum per vehicle in running condition with an initial contribution of not less than Rs. 1 lakh was to be set apart and to be deposited in a bank. The amount so set apart has also been put in the bank with reference to the aforesaid rules for the year ending March 31, 1974. The officers of the assessee-Corporation can operate this account and they can do so only in terms of the legal obligation arising under section 94(3) of the Motor Vehicles Act and the Regulations of the Insurance Fund. According to the assessee, the actual payment might arise on contingency depending upon an accident, which may or may not happen and it is a payment in the nature of an insurance premium to safeguard against any possible large outlay at any single point of time to the inconvenience of the normal operations of the assessee's business. It was pointed out that the interest on the amount deposited in the fund is payable to the assessee-Corporation as per clause (ii). The amount deposited should also be held on behalf of the assessee-Corporation. The fund is not maintaining a separate account of its own. The accounts of the fund are maintained in the books of account belonging to the assessee. The amount deposited should also be held on behalf of the assessee-Corporation. The fund is not maintaining a separate account of its own. The accounts of the fund are maintained in the books of account belonging to the assessee. Therefore, learned standing counsel submitted that the assessee is having ownership over the fund. According to learned standing counsel, the liability is only contingent in nature and it was also not in fact for earning any profit. Hence, it cannot be deductible as business expenditure. The fact that the assessee. for fulfilling a statutory obligation imposed upon it by the Motor Vehicles Act created the fund and contributed the amount which is payable on the happening of an event, would not entitle the assessee to ask for deduction of the amount contributed to the fund as admissible revenue expenditure. In view of the recent Supreme Court judgment in Associated Power Co. Ltd. v. CIT 1996 (218) ITR 95, we are unable to accept the contention put forward by the assessee that the amounts contributed towards the Pallavan Transport Corporation Insurance Fund is in order to fulfil the obligation imposed upon it by the statute and, therefore, it should be allowable as revenue expenditure. As already pointed out the amount appropriated to the contingent reserve, which is set apart to meet possible exigencies is not a provision for known existing liabilities and, therefore, it is not deductible as business expenditure. In that view of the matter, we answer question No. 2 referred to us in the negative and in favour of the Department. No costs.