9911796707
TMI Blog1986 (5) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the said previous year the assessee-company incurred expenditure under the head 'salary, wages and bonus' as under: (1) Salary and wages to the staff and workers Rs. 32,28,120 (2) Monthly incentive wages paid to the staff and workers Rs. 3,66,579 (3) Overtime wages paid to the staff and workers Rs. 2,64,069 (4) Special incentive for attaining target of despatches for the year 1978-79 as per agreement between Management Employees Union) Rs. 1,30,135 (5) Profit sharing bonus as per Payment of Bonus Act, 1965 Rs. 2,08,000 (6) Gratuity paid Rs. 7,475 Out of the above expenses the ITO singled out the following expenses to be of the nature of bonu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring before us it was contended by the authorised representative for the assessee that the annual special incentive and the monthly incentive were wages and not bonus and as such these amounts of the Rs. 3,66,579 and Rs. 1,30,135 could not be disallowed under the first proviso to s. 36(1)(ii) of the Act. For this purpose he relied upon the decision in the case of Titaghur Paper Mills Co. Ltd. vs. Its Workmen (1959) SCR (Supl.) 1012. Alternatively, he argued that even if these amounts are treated as bonus and not wages these are not profit linked bonus and as such are outside the provisions of the Payment of Bonus Act and accordingly not hit by the first proviso to s. 36(1)(ii) of the Act. He also placed reliance on the decision of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are various plans prevalent in other countries for this purpose known as Incentive Wage Plans worked out on various basis, for example, Halsey Premium Plan, Bedaux Point premium Plan, Haynes Manit System and Emerson Efficiency Bonus Plan, Bedaux Point Premium Plan, Haynes Manit System and Emerson Efficiency Bonus Plan. The simplest of such plans is the straight piece-rate plan where payment is made according to each piece produced, subject in some cases to a guaranteed minimum wage for so many hour's work. But the straight piece-rate system cannot work where the finished product is the result of the co-operative effort of a large number of workers each doing a small part which contributes to the result. In such cases, production bonus by to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch nature of production bonus. But admittedly, there is provision in either the Payment of Bonus Act or under the IT Act defining or laying down the nature of production bonus. So we are of the opinion that the principle of law laid down by the Supreme Court as to the nature of production bonus will be applicable in the present case also. So we hold that the production bonus is additional or further emolument and not bonus as understood under the Payment of Bonus Act. 7. The agreement dt. 5th June, 1976 lays down the terms of agreement regarding special incentive. The short recital of the case speaks of the purpose of the scheme "to achieve required invoiced despatches during the current year ending on 30th Sept., 1979". Clauses 3, 4 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lise and appreciate the fairness of a certain amount of output in return to the guaranteed basic wage and dearness allowance. Taking the conditions of Holman-Climax Mfg. Ltd., in particular the parties hereto agree to fix this limit at 50 per cent Productivity Index beyond which the Incentive Scheme shall operate. 3. The parties hereto have observed that the productivity indexes of some group of workmen in the immediate past have, however, been lower than 50 per cent. With a view to minimising their hardship and to enabling them to adjust, it is hereby agreed that no-bonus indexed shall be reduced to 40 per cent instead 50 per cent as recommended in the report of M/s Iboon Private Ltd., by way of concession, for a period of three months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II, Extraordinary, p. 674 dt. 16th Aug., 1965) in the bill introducing it. This runs as follows: "A Tripartite Commission was set up by the Government of India by their Resolution No. WB. 20(A)/61, dt. 6th Dec., 1951, to consider in a comprehensive manner, the question of payment of bonus based on profits to employees employed in establishments and to make recommendations to the government The Commission's report obtaining their recommendations, was received by the Government on 24th Jan., 1984. In their Resolution No. WB. 20(3)/64, dt. 2nd Sept., 1964, the Government announced acceptance of the Commission's recommendations, subject to a few modifications as were mentioned therein. With a view to implement the recommendations of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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