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TMI Blog2005 (5) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... us based on the minimum bonus payable by the company. However, the company paid bonus of Rs. 3,87,888 based on the agreement entered into with the employees in October, 1994. The Assessing Officer disallowed the amount of Rs. 1,87,888 on the ground that the additional liability to pay bonus over and above the provision of Rs. 2,00,000 only arose in the month of October, 1994, i.e., after the end of the accounting period relating to the assessment year under consideration. The Assessing Officer also noted as per the terms of the agreement, the employees who have not joined in the accounting year relevant to assessment year 1994-95, have also been paid bonus for assessment year 1994-95. The payment of bonus to such employees did not relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the end of the relevant previous year, the right to bonus has accrued as at the end of the previous year as per the decision of courts of law. Ld. AR in his letter dated 1-4-2005 (filed in paper book) submitted the department has also raised objection in respect of payment of bonus of Rs. 21,325 to 58 employees who were employed by the assessee after 1-4-1994. It has been pleaded that the payment of bonus being customary in the industry to preserve and contain workers unrest and to develop sound and healthy relations, the same is allowable as deduction. 5. We have heard both the parties. Under section 43B( c ), deduction of bonus is admissible in the assessment year in which payment is made. First proviso to section 43B provide tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her workers. It appears that bonus was not payable to apprentice employees in earlier years. Had it been so, the assessee would have made provision of bonus in respect of such employees also as on 31-3-1994. The decision to make bonus payment to such employees was arrived at due to an agreement entered into on 24th October, 1994. Therefore the liability for payment of extra bonus will relate to the assessment year under consideration. On careful consideration of the facts and circumstances of the case we are of the view that the assessee will not be entitled for deduction in respect of the employees who joined the assessee after close of the accounting year and in respect of others, the assessee will be eligible for deduction in the year un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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