9911796707
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Issues:
1. Disallowance of non-lifting commission 2. Disallowance of provision for bonus Analysis: - The Tribunal considered the provision for payment of bonus at 24% based on an agreement with employees association. The Income-tax Officer rejected the claim, stating the liability arose in the next year. However, the Appellate Assistant Commissioner allowed the provision as it related to the year under appeal. The Tribunal confirmed this decision, noting the liability was known and pertained to the year under appeal, not subject to the proviso of section 36(1)(ii) inserted later. - Regarding non-lifting commission, the company failed to supply products to some distributors, leading to payment of commission. The Tribunal found this payment was for business considerations and commercial expediency. It was allowed as a deduction as the liability arose from the agreement and was incurred for commercial reasons. - The judgment cited precedents where extra bonus payments for industrial peace were considered deductible as business expenditure under section 37(1) of the Income-tax Act. The Tribunal upheld the Appellate Assistant Commissioner's decision to delete the disallowances, stating they were justified in both cases. - The Tribunal found the provision for non-lifting commission and bonus was a legal obligation for the company to maintain industrial peace and for commercial expediency. Consequently, the Tribunal ruled in favor of the assessee, upholding the deletion of disallowances on both counts. - The judgment concluded by answering the reference in favor of the assessee, with no order as to costs.
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