9911796707
TMI Blog1992 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... any, debited a sum of Rs. 5,52,000 in the profit loss account for the year ended March 31, 1976, under the head 'Provision for bonus to staff and workmen'. The plea of the assessee before the Income-tax Officer was that though no bonus was payable by it under the Payment of Bonus Act, 1965, the company decided to pay some amount to its staff and workmen on the ground of commercial expediency. Since the assessee maintains accounts on the mercantile basis, the provision of Rs. 5,52,000 was made in the accounts. The claim was rejected by the Income-tax Officer as well as by the Commissioner of Income-tax (Appeals). The assessee's plea before the Tribunal also failed. The Tribunal held as follows : " Whatever be the effect of the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that similar payments had been made in the earlier years but it was conceded by him that all these were under the Payment of Bonus Act itself ; in fact, customary payment of bonus was not the plea of the assessee before the assessing authorities where the claim was stated to be on the ground of commercial expediency. However, no evidence has been brought forward in support of the allegation that the workers had demanded any bonus and not even resolution of the assessee-company is forthcoming from which we could have found out as to how far the payment was for commercial expediency or deductible with reference to section 28 or section 37(1) or the second proviso to section 36(1)(ii) of the Income-tax Act." Before us, the learned advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conditions must be satisfied before payment not required by the Bonus Act is regarded as reasonable and deductible under section 36(1)(ii). The two provisos must be read together to correctly understand the permissible deduction in terms of clause (ii) of sub-section (1) of section 36. In fact, the legislative intent underlying the amendment is to encourage the management to pay bonus not only to the extent statutorily fixed as payable but also in excess of that limit, provided the payment is otherwise justifiable as a reasonable payment. To say that the second proviso to clause (ii) of section 36(1) has no application in respect of employees covered by the Bonus Act and that bonus paid outside the statutory provisions for bonus is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason merely of the general practice in the particular trade or business. The assessee here is engaged in plantation, growing and manufacturing of tea. Tea plantation labour is highly organised labour and the tea grower and manufacturer has to go by the general treaty which the planters enter into with the plantation workers. This aspect has not been gone into by the Tribunal. We consider that, profit or no profit, if the other planters have paid their workers and employees bonus at a particular rate, it becomes a compulsion on every planter to pay bonus at a comparable rate. That factor alone may justify the payment or provision therefor as reasonable. Accordingly, we decline to answer the question and remit the matter to the Tribunal t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
