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1959 (5) TMI 2 - SC - Income TaxWhether in law, if there is an obligation on the employer to pay a certain bonus, the Excess Profits Tax Officer is bound to allow it as a deduction and is precluded from exercising his discretion under rule 12(1) of the First Schedule of the Excess Profits Tax Act? Whether on a true construction of the agreement between the assessee and its employees and the Provident Fund Rules, the assessee company is under obligation to pay the bonus without deducting the excess profits tax? Held that:- The Excess Profits Tax Officer having come to conclusion (b), viz., that payment to an individual employee or to his provident fund by the company was unreasonable or unnecessarily large, having regard to the requirements of the business, applied conclusion (a), viz., that the payment of percentage without deduction of excess profits tax was per se unreasonable and unnecessary to reduce these large payments and contributions. In our opinion, there was material on which he could proceed, and the Tribunal in affirming that finding had further material to act upon. The decision of the High Court impugned here was correct. Appeal dismissed.
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