9911796707
TMI Blog2002 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1992-93, the assessee claimed a sum of Rs. 23,46,558 towards payment of bonus which includes a sum of Rs. 12,81,108 a liability as per the agreement for payment of bonus entered into on December 22, 1992. In the assessment the Assessing Officer allowed deduction for a sum of Rs. 10,65,450 only which was the provision created in the accounts during the previous year and disallowed the balance of Rs. 12,81,108. The assessee challenged the above order in appeal before the Commissioner of Income-tax (Appeals). The Commissioner (Appeals) allowed the claim of the assessee for deduction of the total sum of Rs. 23,46,558 as the assessee has made the payment before the due date for filing the return under section 139(1) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Condition No.1 in the terms of settlement is as follows: "The management agrees to pay all eligible employees, staff permanent, badli, casuals and trainee casuals and above daily during the bonus period from April 1, 1991, to March 31, 1992, at the rate of 8.33 + 10.67 per cent. as incentive bonus for production and attendance as an ex gratia payment based on their total earnings (basic + DA) for the accounting year 1991-92 ending on March 31, 1992, in full and final settlement of the demand for bonus and ex gratia for all the above six trade unions." In the order of the Tribunal, it was held as follows: If As held by the Supreme Court in Kedarnath Jute Manufacturing Co. Ltd. v. CIT [1971] 82 ITR 363, whether the assessee is entitled to a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the Appellate Assistant Commissioner found that though the agreement was made on April 2, 1974, i.e., in the next year, it related to the year under appeal and, therefore, held that the liability to pay bonus at 24 per cent, as per agreement arrived at should have been taken into consideration to arrive at the correct profit or loss for the year ending March 31, 1974." Upholding the judgment of the Tribunal, the High Court held as follows: "the provision for bonus in excess of what was stipulated under the Bonus Act was for business considerations so that there might not be any labour unrest and the unit might peacefully work. The bonus agreement dated April 2, 1974, fixed the liability for the accounting year ending March 31, 1974 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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