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Commissioner of Income-tax Vs. Sivanandha Mills Limited - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberT.C.P. No. 228 of 1984
Judge
Reported in(1987)63CTR(Mad)11; [1987]163ITR61(Mad)
ActsIncome-tax Act, 1961 - Sections 36(1), 37 and 37(1)
AppellantCommissioner of Income-tax
RespondentSivanandha Mills Limited
Appellant AdvocateN.V. Balasubramanian, Adv.
Respondent AdvocateP.P.S. Janarthana Raja, Adv.
Excerpt:
- .....question when it was sought to be referred in t.c.p. no. 554/1983 by an order dated november 26, 1984, annexed herewith (see infra), learned counsel for the revenue, reargued the matter on the ground that really this expenditure will come under s. 36(1)(ii) of the act and not under s. 37 of the act and that question will have to be decided and, therefore, a reference is called for. we are unable to agree with this contention of the learned counsel. section 36(1)(ii) has reference to bonus paid under the bonus act and incentive bonus or attendance bonus or customary bonus is not bonus paid under the bonus act, and, therefore, s. 36(1)(ii) has no application. therefore, the question will have to be considered whether it will come for deduction under the general provision of s. 37. there.....
Judgment:

Ramaswami, J.

1. The following question is sought to be referred in this petition :

'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the incentive bonus of Rs. 1,28,837 which was made in addition to the regular bonus as per the Payment of Bonus Act should be allowed as a deduction under section 37 of the I.T. Act, 1961 ?'

2. Though we have rejected a similar question when it was sought to be referred in T.C.P. No. 554/1983 by an order dated November 26, 1984, annexed herewith (see infra), learned counsel for the Revenue, reargued the matter on the ground that really this expenditure will come under s. 36(1)(ii) of the Act and not under s. 37 of the Act and that question will have to be decided and, therefore, a reference is called for. We are unable to agree with this contention of the learned counsel. Section 36(1)(ii) has reference to bonus paid under the Bonus Act and incentive bonus or attendance bonus or customary bonus is not bonus paid under the Bonus Act, and, therefore, s. 36(1)(ii) has no application. Therefore, the question will have to be considered whether it will come for deduction under the general provision of s. 37. There could be no doubt that the incentive bonus paid is an expenditure laid out wholly and exclusively for purposes of the business. That was the view we have held in the earlier case. In the result, no question of law which is subsisting could be said to arise out of the order of the Tribunal and, therefore, this petition is dismissed with costs.

3. Counsel's fee Rs. 250.


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