9911796707
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Issues:
1. Allowance of bonus payment exceeding statutory limit under the Payment of Bonus Act. 2. Allowance of extra shift allowance without restriction to the number of days each item of plant and machinery actually worked extra shift. Analysis: 1. The Department raised objections against the allowance of bonus payment exceeding the statutory limit under the Payment of Bonus Act. The CIT (A) allowed the deduction claimed by the assessee for bonus payment beyond the minimum bonus payable under the Act due to a settlement with workers under the Industrial Disputes Act. The Department argued that the excess payment is inadmissible as per Section 36(1) of the IT Act, which limits the deduction to bonus provided under the Payment of Bonus Act. The Department contended that the payment under the settlement is voluntary and not mandatory, thus exceeding the statutory limit. However, the Tribunal held that the payment under the settlement is a necessary business expenditure incurred under statutory compulsion, as evidenced by the conciliation proceedings under the Industrial Disputes Act. The Tribunal rejected the Department's objection and allowed the deduction, emphasizing that the settlement was binding on the employer and not a voluntary payment. 2. The second objection raised by the Department was regarding the allowance of extra shift allowance without restricting it to the number of days each item of plant and machinery actually worked extra shift. The Department relied on a Madras High Court decision to support its contention. However, the Tribunal noted that a circular of the CBDT, supported by various Supreme Court and High Court decisions, allowed the assessee's claim for extra shift allowance. The Tribunal emphasized that the circular of the CBDT, reaffirmed after considering the High Court decision, was binding on IT authorities. Therefore, the Tribunal rejected the Department's objection on this point, ruling in favor of the assessee. In conclusion, the Tribunal dismissed the appeal by the Department, upholding the allowance of bonus payment exceeding the statutory limit under the Payment of Bonus Act and extra shift allowance without restrictions on the number of days worked extra shift.
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