TMI Blog1986 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... was right in holding that the sum of Rs. 358,000 could be regarded as revenue expenditure to be deducted in computing the income, profits and gains of the assessee during the accounting year relevant to the assessment year 1966-67 ? " So far as the first question is concerned, the facts are not in dispute. The assessee claimed relief under section 84 in respect of glass bulb blowing unit, gaseous lamp unit and miniature prefocus lamp. The Incometax Officer rejected the claim of the assessee for the first year under reference by a short order stating that the glass bulb blowing unit, gaseous lamp unit and miniature prefocus lamp unit were in fact extensions of the existing industrial undertakings involving the installation of a few machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The question is largely one of degree and will have to be decided after consideration of the facts of each particular case." The Tribunal had held that having regard to the size of the business of the assessee, there has been a substantial increase in its total output. The Tribunal has noted that the paid-up capital of the company was increased to Rs. 35 lakhs from Rs. 10 lakhs. A large number of facts were also taken into account by the Tribunal: (a) The Government of India, in the Ministry of Commerce and Industry, have granted special licences to establish these new undertakings; (b) The Government of India, in the Chief Controller of Imports and Exports, have granted capital goods licences for importing new machineries for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal. In our opinion, having regard to the facts and circumstances of the case, the Tribunal's order must be upheld on the first question. The second question does not pose any difficulty. After the statutory liability to pay bonus arose, the assessee-company made a provision in its accounts for payment of bonus. The existence of the liability is not disputed. If an amount is set apart for discharge of the liability on actuarial valuation, that has to be allowed as deduction. The principles of law are well settled. In view of the aforesaid, the second question will be answered in favour of the assessee. On the facts and in the circumstances of the case, therefore, both the questions will be answered in the affirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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