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TMI Blog1973 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, on the application filed by the Additional Commissioner of Income-tax, Punjab, J. K. and Chandigarh, requesting the Tribunal to refer to this court a question of law which is said to have arisen out of the Tribunal's order dated 18th January, 1972, in I.T.A. No. 405 of 1970-71. The Tribunal has referred the following question of law for our opinion: "Whether, on the facts and in the circumstances of the case and keeping in view the provisions of the Payment of Bonus Act, 1965, the assessee is entitled to claim deduction of bonus of Rs. 6,200 relating to the financial year 1964-65 for the assessment year 1965-66?" The assessee in this case is not represented. M/s. Jai Bajrang Nail Industries' Prop. Net Ram Tirath Ram Moga (her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, which are reproduced below: "We have carefully considered the rival submissions. Under section 1(4) of the Payment of Bonus Act, the provisions were applicable in respect of every 'accounting year' commencing on any day in the year 1964. Section 2(1) defines 'accounting year' and the assessee's accounting period now under consideration is a period to which the provisions of the Bonus Act apply in view of the definition in section 2(1)(iii)(a). Thus, it is clear that the provisions of the Bonus Act apply to this accounting period. The bonus for the accounting period, under the Bonus Act, had to be computed with reference to the 'available surplus' as defined in section 2(4) which was 60% of the 'available surplus' as defined in sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even though an accounting period may have ended, adjustment of accounts can be done subsequently and, if validly made, such adjustment dates back to the last day of the accounting period. Authority for this is the decision of the Supreme Court in the case of Commissioner of Income-tax v. Mysore Electrical Industries Ltd. In the present case, the bonus payable related to the accounting period under consideration and the assessee, therefore, sought for the deduction of bonus as computed in accordance with the provisions of the Payment of Bonus Act, 1965, which covered the accounting period. As the assessee maintains its accounts on the mercantile system, we are of the view that the amount of Rs. 6,200 is, on the facts set out by us, an admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(1)(iii)(a). There is no dispute that after arriving at the allocable surplus, the maximum bonus was to be determined under the provisions of section 11(1) and this was the bonus which the assessee sought to deduct. The revenue does not deny the right of the assessee to deduct this amount, but the stand taken is that it has to be accounted for in the assessment year of 1966-67 and not the year in question, which, to our mind, is an untenable stand. The assessee under the legislation is required to pay the bonus for the year in question and he is entitled to make adjustment in his accounts, which would relate back to the last date of the accounting period. The effect of the enforcement of the Bonus Act would be that the amount of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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