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Ralson (India) Ltd Versus Income Tax Officer, New Delhi

2015 (10) TMI 1494 - ITAT DELHI

"Good work reward" - whether it constitutes bonus within the meaning of the section 36(1)(ii) or an Inam payment allowable u/s 37? - Held that:- There is nothing to suggest that the good work reward given by the assessee to its employees has any relation to the profits that the assessee may or may not make. It appears from the order of the Tribunal that it has relation to the good work that is done by the employee during the course of his employment and that at the end of the financial year on t .....

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965. It was held that such types of bonus as well as ex gratia payment would not fall within the provisions of section 36(1)(ii) of the Act and that they were payments allowable as revenue expenditure having been incurred for the purpose of business expediency. These payments were not of the type contemplated by the Payment of Bonus Act. It was held that it was an ex gratia payment or some sort of reward given to an employee for the good work done by him and would therefore, fall within the cate .....

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This is an appeal filed by the appellant for the assessment year 2004-05 impugning the order of the learned CIT(A)-XVIII, New Delhi, dated 29.08.2013 raising the following grounds: i. That the re-opening of Assessment u/s 147/148 is bad in law and in particular because the reason for re-opening this Assessing initially is different from the reason mentioned subsequently in the order dated 18.10.2011 of Assessing Officer passed on the objections taken by the assessee. ii. That the learned Commis .....

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cle and rickshaw. The appellant filed the return of income for the assessment year 2004-05 on 31st August, 2004 declaring total income of ₹ 3,43,17,866/-. The return was processed under Section 143(1) of the Income-tax Act, 1961 (for short "the Act") on 25th February, 2005. Subsequently, the case was selected for scrutiny by issuing notice under Section 143(2) of the Act and finally the assessment order came to be passed under Section 143(3) vide order dated 29.11.2005 at a total .....

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by this order, an appeal was preferred by the appellant before the learned CIT(A)-XVII, New Delhi, who vide impugned order dated 29th August, 2013 dismissed the appeal. Aggrieve, the appellant filed the present appeal. 3. The ground relating to the opening of reassessment i.e. ground no. 1 was not pressed by learned Authorized Representative. Hence, the same is dismissed as such. 4. As regard ground no. 2, it is submitted that the issue is covered by the decision of Delhi Bench of ITAT passed in .....

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) has held as under:- "35. The third question that has been referred for our consideration relates to "good work reward" and whether it constitutes bonus within the meaning of the section 36(1)(ii) of the Act. 36. The Tribunal has noted that the word 'bonus' has not been defined anywhere including in the Payment of Bonus Act, 1965. However, for the purpose of industrial law, four types of bonus have been recognized and they are as follows : (a) Production bonus. (b) Contra .....

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company makes and is not relatable to production incentive. 38. The Revenue had challenged the decision of this court by filing a special leave petition in the Supreme Court in [1988] 171 ITR (St.) 256. The special leave petition was dismissed by the Supreme Court on May 11, 1988, thereby, in a sense affirming the view taken by this court that production incentive paid to an employee was not bonus and therefore, is not covered under the provisions of section 36(1)(ii) of the Act. 39. In so far a .....

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