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TMI Blog2015 (10) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... ambit of section 36(1)(ii) of the Act as contended by the Revenue. In CIT vs. Autopins (India) [1991 (4) TMI 96 - DELHI High Court] court had occasion to consider payment of various kinds of bonus such as production bonus, attendance bonus and incentive bonus and whether they were within the contemplation of the Payment of Bonus Act, 1965. It was held that such types of bonus as well as ex gratia payment would not fall within the provisions of section 36(1)(ii) of the Act and that they were payments allowable as revenue expenditure having been incurred for the purpose of business expediency. These payments were not of the type contemplated by the Payment of Bonus Act. It was held that it was an ex gratia payment or some sort of reward g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the appellant is engaged in the business of manufacturing and sale of tyres, tubes, hubs and accessories for cycle and rickshaw. The appellant filed the return of income for the assessment year 2004-05 on 31st August, 2004 declaring total income of ₹ 3,43,17,866/-. The return was processed under Section 143(1) of the Income-tax Act, 1961 (for short the Act ) on 25th February, 2005. Subsequently, the case was selected for scrutiny by issuing notice under Section 143(2) of the Act and finally the assessment order came to be passed under Section 143(3) vide order dated 29.11.2005 at a total income of ₹ 3,44,55,964/- after making several disallowances. Thereafter, a notice under Section 148 dated 30.03.2011 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd whether it constitutes bonus within the meaning of the section 36(1)(ii) of the Act. 36. The Tribunal has noted that the word 'bonus' has not been defined anywhere including in the Payment of Bonus Act, 1965. However, for the purpose of industrial law, four types of bonus have been recognized and they are as follows : (a) Production bonus. (b) Contractual bonus. (c) Customary bonus usually associated with festivals. (d) Profit-sharing bonus. The good work reward that is given by the assessee to some employees on the recommendation of senior officers of the assessee does not fall in any one of these above categories. 37. For the purpose of section 36(1)(ii) of the Act, it has been held by this Court in CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of Bonus Act, 1965. It was held that such types of bonus as well as ex gratia payment would not fall within the provisions of section 36(1)(ii) of the Act and that they were payments allowable as revenue expenditure having been incurred for the purpose of business expediency. These payments were not of the type contemplated by the Payment of Bonus Act. It was held that it was an ex gratia payment or some sort of reward given to an employee for the good work done by him and would therefore, fall within the category of expenditure incurred for the purpose of business expediency and for improving the working of the assessee. Therefore, it would not fall within the meaning of section 36(1)(ii) of the Act but would fall within the ambit o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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