TMI Blog1996 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in computing the total income of the assessee for the assessment years 1972-73 to 1975-76? (R. A. Nos. 442 to 445) 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to the deduction of Rs. 1,18,216 being the recoverable bonus paid to the employees written off in the assessment year 1974-75? (R. A. No. 444) 3. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the payments made to the employees under the Voluntary Retirement Scheme are admissible deductions in computing the total income of the assessee for the assessment years 1974-75 and 1975-76 ? (R. A. Nos. 444 and 445)" In so far as question No. 1 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 230 ITR 703) in the case of the same assessee, dated June 10, 1996. Accordingly we answer question No. 3 in the affirmative and against the Department. So far as question No. 2 is concerned, it relates to deduction of Rs. 1,18,216 being the recoverable bonus paid to the employees written off in the assessment year 1974-75. This sum had been paid as advance to the assessee's employees on October 11, 1971, under the agreement dated October 6, 1971, with the stipulation that it would be recovered subsequently. The assessee submitted that the matter was later discussed with the union and it was agreed not to recover the same in order to maintain good industrial relations. It was resolved at the meeting of the board of directors of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins to be seen that the abovesaid decision of this court is distinguishable on the facts. According to the facts arising in T. C. No. 1080 of 1980 (see [1997] 225 ITR 648), there was a resolution by the board of directors not to recover the amount paid by way of recoverable bonus earlier. But, at the same time, in the above resolution, it was also resolved to adjust the above amount to bonus paid account in the accounts for the current financial year. Therefore, what was paid earlier was treated as payment made in the current financial year. It is under those circumstances, this court held that the payment is only bonus and not loan. Inasmuch as there is no finding by the Tribunal as to whether the payment of bonus was in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal followed an earlier decision of this court in the case of Higginbotham Limited, Madras. According to the Tribunal, a similar issue as arising in the present case, came up for consideration before it, in the case of Higginbotham Limited, Madras. It would mean that the Tribunal would have verified that the bonus payment was in accordance with the provisions contained in section 36(1)(ii) of the Act. Even though there is no definite finding by the Tribunal that the bonus payment was allowable as deduction under section 36(1)(ii) of the Act in the present cases inasmuch as according to the Tribunal the facts arising in the present case as well as in the case of Higginbotham Limited, Madras, are similar, it came to the abovesaid conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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