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TMI Blog1999 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee's claim for bonus is admissible on accrual basis and not on payment basis ?" The assessee is a co-operative society. It made up its accounts taking the year ending June 30, as its accounting year and made a provision for bonus payable under the provisions of the Payment of Bonus Act. The assessee claimed deduction of the provision made towards the bonus, however, the Income-tax Officer disallowed the provision made for the years in question and allowed the actual payment of bonus only. The assessee preferred an appeal to the Commissioner of Income-tax (Appeals) and the Commissioner (Appeals) hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting, the liability to pay bonus is allowable on accrual basis. He submitted that it is not permissible for the assessee to claim double deduction, one at the time of payment and another at the time when the provision for bonus was made in the accounts. Learned counsel relied upon the decision of the Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT [1991] 188 ITR 787, at page 789, and submitted that this court may direct the assessee to follow a regular system of accounting so that double deduction can be avoided. Mr. V. S. Jayakumar, learned counsel for the respondent, on the other hand, submitted that the assessee has been maintaining its books of account consistently and on the basis of the regular system of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is entitled to claim deduction on the basis of the provision made in the accounts. Under the circumstances, we find that the Appellate Tribunal has rightly held that on the basis of the method of accounting regularly followed by the assessee, the assessee would be entitled to claim deduction on the basis of provision made in the accounts on the basis of the certificate issued by the statutory auditors and not necessarily on the basis of payment as the said system of accounting was regularly followed by the assessee year after year and it was a regular method of accounting accepted by the Department. So, we are of the opinion that the assessee is entitled to claim deduction for the provision for bonus and since it is a statutory l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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