9911796707
TMI Blog1981 (9) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,220 in Palasa branch and a very huge amount of bonus to staff of Rs. 31,226 on salaries of Rs. 14,242 paid in Vetapalem head office. An amount of Rs. 5,633 was also paid as bonus to workers at Vetapalem head office. The ITO was of the view that the bonus paid to workers of Rs. 5,633 was reasonable in accordance with the provisions of the Bonus Act. According to the ITO the same cannot be said with reference to the bonus paid to the staff at Vetapalem head office and Palasa Branch. The ITO pointed out that the salary paid to the staff at Vetapalem is only Rs. 14,242 while the bonus paid to the staff is more than the double of this figure, viz., Rs. 31,226. According to the provisions of the Bonus Act minimum bonus to be paid is Rs. 8.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the ITO was not prepared to accept the credit in the name of this person as genuine. Therefore, the same was treated as representing the income of the assessee not disclosed and, hence, assessed under the head "Income from other sources". On appeal, the Commissioner (Appeals) with regard to the bonus issue held : "I find from the records that the basis on which the bonus has been paid to the workers is not clearly available though the Income-tax Officer his treated it as in accordance with the Payment of Bonus Act. In the circumstances he is directed to enquire into the percentage of the salary that would have been payable as bonus during the accounting year in terms of the Payment of Bonus Act, 1965, and to restrict the allowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a copy of the agreement on 5-8-1976, with effect from 17-5-1976. It was submitted that the assessee was paying bonus to the staff since the assessment year 1976-77 as per the preceding agreement entered into with the employees and this payment has been accepted by the income-tax authorities for earlier years. Therefore, it was contended that without giving due regard to the terms of the agreement filed on 27-9-1976 the ITO added this amount. With regard to the payment of Rs. 555 as bonus to the staff at Palasa branch, it was stated that there is no agreement and, hence, the bonus was paid at 25 per cent of the salary and it is contended that it is the practice of the department to allow up to 25 per cent of the salary. The appellant furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ukumchand Jute Mills Ltd. v. Second Industrial Tribunal [1980] 3 Taxman 43. In the said case the Supreme Court held that--- "The Payment of Bonus Act, 1965 was a complete code but was confined to profit-oriented bonus only. It purports to provide for the payment of bonus "on the basis of profits or on the basis of production or productivity and for matters connected therewith." The emphatic inference flows therefrom that the customary or contractual (or traditional) bonus goes beyond the pale of the Amending Act which modifies the previous one by bringing within its range bonus on the basis of production or productivity also. Section 17 of the Payment of Bonus Act has been left intact. Section 17 in express terms refers to puja bonus an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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