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Commissioner of Income-tax Vs. Babcock and Willcox of India Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberMatter No. 1235 of 1984
Judge
Reported in[1987]165ITR105(Cal)
ActsIncome Tax Act, 1961 - Sections 37, 256 and 256(2)
AppellantCommissioner of Income-tax
RespondentBabcock and Willcox of India Ltd.
Cases ReferredHukumchand Jute Mills Ltd. v. Second Industrial Tribunal
Excerpt:
- .....ltd. v. second industrial tribunal, : (1979)illj461sc , and allow the assessee's deduction for the bonus paid.2. it has been found as a fact that the assessee had paid similar bonus in past years and have been allowed deduction of the same. in the year involved, the assessee had declared the bonus in dispute prior to the promulgation of the ordinance and that such bonus was paid on commercial expediency and to maintain good relations, with the employees. we find that the rate at which the bonus had been paid falls within the range allowed by the ordinance.3. for the above reasons, it does not appear to us that any particular question of law arises in the case which needs to be considered by this court. we agree with the order of the tribunal rejecting the application of the revenue under.....
Judgment:

Ray, J.

1. This rule issued on an application of the Revenue under Section 256(2) of the Income-tax Act, 1961, calls upon M/s. Babcock & Willcox of India Ltd., the assessee, to show cause why this court should not direct the Tribunal to refer the following question, stated to be a question of law arising out of the order of the Tribunal, for the opinion of this court :

' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the finding of the Commissioner of Income-tax (Appeals) that the sum of Rs. 1,99,781 paid by the assessee-company to its employees as customary bonus was an allowable deduction '

The Revenue contends that in view of the Bonus (Amendment) Ordinance promulgated on September 25, 1975, the Tribunal was not justified in applying the principles laid down by the Supreme Court in Hukumchand Jute Mills Ltd. v. Second Industrial Tribunal, : (1979)ILLJ461SC , and allow the assessee's deduction for the bonus paid.

2. It has been found as a fact that the assessee had paid similar bonus in past years and have been allowed deduction of the same. In the year involved, the assessee had declared the bonus in dispute prior to the promulgation of the Ordinance and that such bonus was paid on commercial expediency and to maintain good relations, with the employees. We find that the rate at which the bonus had been paid falls within the range allowed by the Ordinance.

3. For the above reasons, it does not appear to us that any particular question of law arises in the case which needs to be considered by this court. We agree with the order of the Tribunal rejecting the application of the Revenue under Section 256(1) of the Income-tax Act, 1961.

4. The application, therefore, fails and we discharge the rule without any order as to costs.

D.K. Sen, J.

5. I agree.


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