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TMI Blog1996 (11) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Case Petition No. 519 of 1980, dated March 9, 1981, the Tribunal referred the following question for the opinion of this court under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as the "Act ") : "Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 36(1)(ii) of the Income-tax Act, 1961, the Appellate Tribunal was righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the provisions of section 36(1)(ii) of the Act, any bonus paid in excess of 20 per cent. of the salary of the employees could not be allowed and in this view, he disallowed a sum of Rs. 1,93,419 as excess bonus paid by the assessee. According to the Income-tax Officer, the Payment of Bonus Act and the amendment of section 36(1)(ii) came into effect from September 25, 1975, and, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal relying on its earlier order in I. T. A. No. 936 (Mds.) of 1977-78, dated August 11, 1978, in the case of Madurai Ramnad Transport (Private) Ltd. held that the customary bonus paid would not be hit by the first proviso to section 36(1)(ii) of the Act and that, therefore, the entire payment of bonus should be allowed as a deduction. Before us, learned standing counsel appearing for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact remains that the excess bonus paid over and above the limit prescribed under the Payment of Bonus Act was allowed as a deduction by the Tribunal, inasmuch as the said bonus is customary bonus, in view of the decision of the Supreme Court in Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai [1976] 49 FJR 15 ; AIR 1976 SC 1455. On the facts, the Tribunal came to the conclusion that the quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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