TMI Blog1997 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... stated a case and referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), for the assessment year 1980-81 "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in allowing as deduction the entire claim for payment of additional bonus to the workers, even though such payment alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the employees have an enforceable right by virtue of the settlement arrived at under the Industrial Disputes Act against the assessee for the amount agreed to be paid and the amount was paid for business consideration and hence it was allowable under section 37 of the Act. The Appellate Tribunal, on appeal, held that the amount was paid only as incentive bonus and not profit-sharing bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 37 of the Act. The above view rendered in Sivanandha Mills Ltd.'s case [1985] 156 ITR 629(Mad), was followed in T. C. No. 1185 of 1985, dated March 4, 1997. Accordingly, we are of the view that the Tribunal has correctly come to the conclusion that the incentive bonus paid to the employees is allowable under section 37 of the Act. Accordingly, we answer the question referred to us in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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