Law:

Section:

Section 36(1)(ii) of the Income-tax Act, 1961 - Bonus or Commission - Assessment year 1965-66 - During relevant accounting year assessee made provision towards bonus - Payment of Bonus Act, 1965 came into force and made applicable in respect of every 'accounting year' commencing on any day in the year 1964 after arriving at allocable surplus, maximum bonus was to be determined under provisions of section 11(1) which assessee sought to deduct - Stand taken was that it had to be accounted for in assessment year of 1966-67 and not year in question - Whether bonus payable in instant case related to accounting period in question and assessee rightly sought for deduction of bonus in accordance with provisions of the Payment of Bonus Act - Held, yes FACTS On 3-8-1965 the assessee filed income tax return and a claim for payment of bonus was limited to Rs. 2000. The Payment of Bonus Act of 1965 received the assent of the President on 25-9-1965, and under section 1(4) of the Bonus Act, provisions regarding payment of bonus were made applicable in respect of every 'accounting year commencing on any day in the year 1964. In view of the coming into force of the Bonus Act, the assessee filed a revised return on 28-3-1966, and claimed additional bonus of Rs. 6,200. The ITO disallowed the assessee's claim for the allowance of extra bonus of Rs. 6,200 in the year in question on the ground that no provision for that amount was made in that year nor was the amount paid in that year. The assessee filed an appeal but the AAC confirmed the order of the ITO. On second appeal the Tribunal allowed the assessee's claim. On reference: HELD After enforcement of the Bonus Act, under section 1(4) provisions regarding payment of bonus were made applicable in respect of every 'accounting year' commencing on any day in the year 1964. There was no dispute that after arriving at the allocable surplus, the maximum bonus was determined under the provisions of section 11(1) and this was the bonus which the assessee sought to deduct. The revenue did not deny the right of the assessee to deduct this amount, but the stand taken was that it had to be accounted for in the assessment year of 1966-67 and…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492