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TMI Blog1961 (10) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 1952, 30th of November, 1953, and 30th of November, 1954. The method of valuing the closing stock adopted by the assessee was to value the stock at cost price. Bonus paid to the employees had at no time been included by the assessee company in the cost price of the manganese ore. It is an admitted position that in all these years the cost price of the closing stock was lower than the market price. In the assessment year 1953-54 the assessee company paid ₹ 1,14,810 by way of bonus to its employees relating to the previous year. Similarly, it paid ₹ 2,51,710 in the assessment year 1954-55 and ₹ 4,44,556 in the assessment 1955-56. For the first time in the assessment year 1953-54 the Income Tax Officer included the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtionate amount of the bonus paid in those respective year by the assessee to its employees in determining the closing stock of those three years. As already stated he made adjustment on this basis in relation to the opening stock of the assessment year 1954-55 and 1955-56 but did not make such adjustment in respect of the opening stock of the assessment year 1953-54. The appeal filed by the assessee before the Appellate Assistant Commissioner failed. In the second appeal taken by the assessee to the Tribunal, the Tribunal held that, in the present day circumstances, bonus has long ceased to be an ex gratia payment payable only when there are profits. On the other hand, bonus paid had become part and parcel of the wages and salary as the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock in the same manner and on the same basis ? 2. In our opinion, the questions framed have not been happily worded to bring out the real and principal controversy between the assessee and the Income Tax authorities. That question is : Whether the Tribunal was justified in law in holding that the proportionate amount of bonus paid by the assessee to its employees can be taken into account in determining the cost price of the closing stock ? 3. The Tribunal itself in the opening sentence of paragraph 4 of its order has stated that this is the real question been clearly and specifically raised in this form in the statement of the case. In our opinion, therefore, it is necessary to frame the aforesaid question to brig out the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in upholding the addition of a proportionate part of the bonus to the cost of the stock on hand for the purpose of valuation as well as whether it was at any rate justified in upholding the addition of the proportionate part of the bonus in the earlier years paid in the accounting year. It is difficult to hold that, when the assessee has been agitating this principal question all through and when the Tribunal itself in its order observed that that was the real question that arose in the appeal, the assessee was, in his application under section 66(1), not asking the Tribunal to refer that question of law to this court. Mere mistakes in framing the questions or unhappy framing of questions, in our opinion, would not warrant a finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be satisfied before a demand for bonus can be justified and they are, (1) when wages fall short of the living standard and (2) the industry makes huge profits part of which are due to the contribution which the workmen make in increasing production............. 7. It is, therefore, clear that the claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has learned huge profits. In this case their Lordships have dealt with various allowances that have to be made to the employers to ascertain the available surplus from which part of the amount could be paid to the employees as bonus. For the purpose of this case, it is not necessary for us to go into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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