9911796707
TMI Blog2013 (9) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Tribunal was legally correct in holding that the incentive of Rs.2,10,67,677/- received by the assessee by way of additional quota for free sale sugar which is directly connected with the business activities of the assessee, was on capital account and hence not taxable as a revenue receipt? 2. Whether on the facts and in the circumstances of the case, the learned ITAT was legally correct in deleting the dis-allowance of Rs. 13,98,899/- made u/s 43B in respect of unpaid production incentive bonus covered under section 36 (i) (ii) of the I.T. Act ?? 3. Brief facts, as stated in the reference are as follows:- "The assessee is a cooperative society engaged in the business of manufacture and sale of sugar. For the year ending 31st Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e objection of the assessee by observing that the benefit received by the assessee under the Sampat Scheme was in the nature of revenue receipt as it had not been received to meet out the capital cost. Aggrieved by the order of C.I.T.(A) the assessee filed an appeal before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal has held that the said incentive received by the assessee was on capital account and that it was not taxable as a revenue receipt. In the assessment proceedings, while examining the accounts, the Assessing Officer noticed that the assessee had debited to the Profit and Loss account a sum of Rs.17,80,342/- on account of production incentive bonus. Out of this amount a sum of Rs.13,98,899/- remained uphe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was productivity linked bonus, was relating to the business and has been allowed earlier in the case of assessee itself. The issue was, therefore, decided in favour of the assessee. On the question of bonus, the department's view is that payment being specifically covered under section 36 (i) (ii), provisions of Section 37 were not applicable and the unpaid bonus was obviously disallowed in view of clause (c) of Section 43-B read with section 36(i)(ii) of the Income Tax Act, which permits deduction of bonus only on actual payment basis." 4. The reference was heard on 28.04.2005, on which a judgment was rendered deciding both the question in favour of revenue and against the assessee. An application for recall of the order was filed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and Tea Co (P) Ltd [(1992) 197 ITR 310] that the Payment of Bonus Act 1965 does not prevent the payment of additional wages to the employees by the assessee to its workmen as per memorandum of settlement, and that since the ex-gratia payment does not fall under the purview of the Payment of Bonus Act, the payments would be allowable as a deduction under Section 37 of the Act. 8. In the present case, we find from the judgment of the Tribunal that though productivity linked incentive bonus was to be paid, which was allowable as a deduction under Section 37 of the Act, the amount was not actually paid by the Company. The Company was claiming allowance of Rs.13,98,899/- on the unpaid productivity incentive bonus as on 31.3.1990. We agree wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
