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TMI Blog2012 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal ought to have considered the fact that the act of depositing the bonus amounts payable to the workers into a separate bank account is to be construed as actual payment made in the present accounting year? 2. Whether on the facts and circumstances of the case, the Tribunal was right in holding that bonus paid based on settlement reached after the accounting year is allowable in present assessment year?" 2. It is seen from the facts narrated herein that in respect of the accounting year relevant to the assessment year 1997-98, there was a dispute between the management and employees as regards the percentage of bonus payable by the assessee. While the assessee declared 15% bonus, the employees insisted bonus at 20% as in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to deposit the said amount in a separate account maintained by the asssessee, the Commissioner of Income Tax (Appeals) allowed the appeal filed by the assessee. 4. Aggrieved by this, the Revenue went on appeal before the Income Tax Appellate Tribunal. The Tribunal pointed out that the assessee had not produced any evidence that it had created irrevocable trust called Workers Bonus Payment Trust. The Tribunal, keeping in mind the object of Section 43 B of the Income Tax Act that the claim for deduction is allowable on actual payment, set aside the order of the Commissioner of Income Tax (Appeals) and restored the order of the Assessing Authority holding that setting apart particular amount towards bonus would not tantamount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the separate account, which cannot be in any manner used by the asssessee, the deduction has to be granted. 6. In the decision reported in (2009) 319 ITR 306 (Commissioner of Income Tax Kolkata III V. Alom Extrusions Limited) the Apex Court pointed out that the object of Section 43 B, inserted under the Finance Act 1983, with effect from 1.4.1983, was to disallow deduction claimed merely by making a book entry based on mercantile system of accounting. Referring to the deletion of the second proviso, the Apex Court pointed out to the amendment to the first proviso brought about uniformity by equating tax, duty, cess and fee with contribution to welfare funds and with the uniformity brought about in the first proviso, the Finance Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t money must flow from the assessee to the public exchequer as required under section 43B. By no stretch of imagination can it be said that furnishing of bank guarantee is actual payment of tax or duty in cash." 9. Going by the enunciation of law by the Apex Court that the deemed payment could not be treated as actual payment to qualify for deduction under Section 43B of the Income Tax Act, we do not agree with the submission of the learned counsel appearing for the assessee herein that depositing the amount in a bank, even if it be in a separate account, would satisfy the provisions of Section 43 B as actual payment. Reading the decision reported in (2010) 326 ITR 308 (Commissioner of Income Tax V. Sri Venkatesa Mills Ltd.) along w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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