Judgment :- JANARTHANAM, J. This petition at the instance of the CIT, Tamil Nadu III, Madras, is for issuance of a direction to the Tribunal to state a case and refer the question of law, as below, for the opinion of this Court. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the chit incentive expenses and chit expenses incurred by the assessee cannot be considered to be sales promotion expenditure liable to be disallowed under s. 37(3A) of the IT Act, 1961. Arguments of Mrs. Chitra Venkataraman, learned counsel representing Mr. C. V. Rajan, learned junior standing counsel for income-tax cases representing the Revenue and Mrs. Pushya Sitaraman, learned counsel appearing for the assessee, were heard. The assessee, it is said, is engaged in the business of purchase and sale of gold and silver wares. The assessment in question is relatable to the asst. yr. 1985-86. The Tribunal said in its order that the same question was referred for the earlier year and it was rejected as a question of fact and hence this question cannot be referred: (a) Sub-s. (3A) of s. 37 of the IT Act, 1961 (Act No. 43 of 1961), which was inserted by Finance Act, 1983, w.e.f. 1st April, 1984, and omitted by Finance Act, 1985, w.e.f. 1st April, 1986, reads as under" (3A) Notwithstanding anything contained in sub-s. (1), where the expenditure or, as the case may be, the aggregate expenditure incurred by an assessee on any one or more of the items specified in sub-s. (3B) exceeds one hundred thousand rupees, twenty per cent of such expenses shall not be allowed as deduction in computing the income chargeable under the head 'Profits and gains of business or profession'. "(b) Sub-s. (3B) of s. 37 thereof, inserted by the Finance Act, 1983, w.e.f. 1st April, 1984, and omitted by Finance Act, 1985, w.e.f. 1st April, 1986, reads as under" (3B) The expenditure, referred to in sub-s. (3A) is that incurred on (i) Advertisement, publicity and sales promotion; or (ii) running and maintenance of aircraft and motor cars; or (iii) payments made to hotels Explanation : For the purpose of sub-ss. (3A) and (3B), - (a) the expenditure specified in cl. (i) to cl. (3A) and (3B), - (a) the expenditure specified in cl. (i) to cl. (iii) of sub-s. (3B) shall be the aggregate amount of expenditure incurred by the assessee as reduced by so much of such expenditure as is not allowed under any other provision of this Act; (b) expenditure on advertisement, publicity and sales promotion shall not include remuneration paid to employees of the assessee engaged in one or more of the said activities; (c) expenditure on running and maintenance of aircraft and motor cars shall include, - (i) expenditure incurred on chartering any aircraft and expenditure on hire charges for engaging cars plied for hire; (ii) conveyance allowance paid to employees and, where the assessee is a company, conveyance allowance paid to its directors also." A conjoint reading of sub-ss. (3A) and (3B) of s. 37 of IT Act, makes it crystal clear what shall not be allowed as a deduction in computing the income chargeable under the head 'Profits and gains of business or profession'. If the correct expenditure incurred by the assessee on any one or more of the items specified in sub-s. (3B) exceeds one hundred thousand rupees, then twenty per cent of such excess shall not be allowed as a deduction in computing the income chargeable under the head "Profits and gains of business of profession". It is thus crystal clear that what shall not be allowed as a deduction in computing the income chargeable under the head 'Profits and gains of business or profession' is, after all, an ascertainment of fact from the accounts of the assessee-dealers and nothing further. Therefore, the order of the Tribunal in rejecting the reference, not as a pure question of law, cannot at all be found fault withIn this view of the matter, this reference application deserved to be dismissed and the same is accordingly dismissed.