TMI Blog1995 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case, the Tribunal was right in law in coming to the conclusion that the liability of Rs. 15,58,399 for Payment of Bonus Act, 1965 (as amended), was allowable under the provision of the Income-tax Act, 1961, in the assessment year under consideration ? " Having heard learned counsel appearing for the parties at some length, in our opinion, the question is of academic importance as will appear from the facts to be stated hereinafter and need not be answered. As a result of coming into force of the Bonus (Amendment) Act, 1977 (hereinafter called "the Act of 1977"), which came into force with effect from September 3, 1977, the assessee incurred additional liability of Rs. 15,58,399 for payment of bonus. The assessee follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility having arisen only on account of the coming into force of the Act of 1977, on September 3, 1977, no liability can be said to have accrued or arisen prior to that date and, therefore, the assessee cannot claim deduction in the assessment year 1977-78, the previous year of which ended prior to September 3, 1977. However, the Tribunal was of the view that as a logical consequence of the statutory provision referred to above when the liability of additional bonus became, the liability of the accounting year commencing on any day in the year 1976, and the previous year in question corresponded to that provision, the liability also must be deemed to have accrued or arisen during the previous year relevant to the assessment year in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected in any manner. In that event, in our opinion, the question of law raised in this case is of sheer academic value which need not be answered. We decline to do so. At the instance of the assessee also, the Tribunal has referred the following two questions for our decision : " 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the commission paid to the three directors of the company should be included in the remuneration for the purpose of determining the disallowance under section 40(c) of the Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the disallowance of Rs. 22,468 being the additional payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s answered in the affirmative in favour of the Revenue and against the assessee. Question No. 2 relates to the sum claimed by the assessee as revenue expenditure on account of additional payment made in terms of rupees on account of difference in the exchange rate when the liability was incurred and when the liability was discharged for the purpose of purchasing the asset from a foreign country, the price of which was payable in foreign currency. This court has taken a view in New India Industries Ltd. v. CIT [1993] 203 ITR 933 keeping in view the provisions of section 43A that such an increase in liability is an expenditure of capital nature inasmuch as by a statutory provision such increase or decrease in the liability arising on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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