1993 (2) TMI 4 - SC - Income Tax

Whether, on the facts and in the circumstances of the case, the sum of Rs. 1,01,530 provided as bonus relating to the profits of the assessment year 1961-62 was an allowable deduction under section 10(2)(x) - merely because the assessee has made a provision for meeting such a contingent liability, it is not entitled to deduction of the said amount under section 10(2)(x) read with section 10(5)

Summary

The Supreme Court dismissed the appeal by the assessee regarding the deduction of a sum provided as bonus for the assessment year 1961-62. The court held that since the liability to pay bonus was created after the closing of the accounting year, the assessee was not entitled to the deduction under the Income-tax Act. The decision was based on previous court rulings.