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TMI Blog2005 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The Income-tax Appellate Tribunal, Allahabad has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1982-83 for opinion to this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the amount of Rs. 59,271 paid as incentive bonus was allowable expenditure?" The brief facts of the case are as follows: The assessee/opposite party (hereinafter referred to as "the assessee"), is a company. In its profit and loss account the assessee claimed incentive bonus amounting to Rs. 59,271 as business expenditure to meet out the business expediency. The assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orker. Heard learned standing counsel. No one appears on behalf of the assessee. The submission of learned standing counsel is that the payment of Rs. 59,271 was in the nature of bonus and since it was in excess of 20 per cent. of the salary it was rightly disallowed. The submissions of learned standing counsel cannot be accepted in view of the findings recorded by the Commissioner of Income-tax (Appeals) as well as by the Tribunal. Both the authorities have held that the amount was paid at figures varying from 10 per cent. to 19 per cent. of the salary depending on the performance appraisal of each employee on time scale and it was by way of additional salary linked with productivity and efficiency of workers and not linked with the prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head "Profits and gains of business or profession." The Commissioner of Income-tax (Appeals) and the Tribunal have recorded findings that it was paid at figures varying from 10 per cent. to 19 per cent. of the salary depending upon the performance appraisal of each employee on time scale by way of additional salary linked with productivity and efficiency of the worker. The said amount was paid to the employees as production incentive and was wholly and exclusively for the purposes of business and as such, allowable under section 37 of the Act. In this view of the matter, we do not find any error in the order of the Tribunal and the same is accordingly upheld. In the result, the question referred is answered in the affirmative, in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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