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TMI Blog2007 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal made in ITA No.2777/Mds/1993, dated 8.8.2002. 2. The Revenue is the appellant. During the relevant assessment year 1991-92, the assessee filed a return of income on 27.12.91 in response to a notice u/s. 143(2) admitting a total income of Rs.6,43,610/-. The assessing officer inter alia disallowed a sum of Rs.13,08,387/- being bonus paid in excess of provision made, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that it is not a contractual liability and it is a settlement between the employer and the employees without being a dispute between them and hence, the amount as provided and paid subsequently shall be allowed as a deduction. Aggrieved by the same, the present appeal has been preferred by the Revenue raising the following substantial questions of law: "1. Whether in the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax v. Lakshmi Machine Works Ltd [(2000) 241 I.T.R. 53], cited supra, this Court, while dealing with the issue whether the assessee can claim the amount paid after the end of the accounting year to the extent the same was in excess of the provision that had been made in the accounts, as an item of expenditure in the year of account, held as follows: "Section 19 of the Payment of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing year. The assessee, who follows the mercantile system of accounting, therefore, must necessarily provide for the payment of bonus to his employees and it is only the quantification that is postponed."... " ... in the instant case, according to the employer/assessee, it had been the habit of the employer in the past to offer to pay bonus at a lower rate while the employees made a claim for pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, the amount paid after the end of the accounting year, which was in excess of the minimum bonus prescribed under the Bonus Act and what is determined as bonus payable by the employer was only a settlement between the workers and the management and not on the demand made by the workers to settle the disputes persisting between them. Hence, the law laid down in the above said case is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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