Revenue expenditure on additional bonus fails as a legal issue where concurrent factual findings support the employee payments.

Additional bonus payments to employees were treated as revenue expenditure where the income-tax authorities and the Tribunal found, on concurrent facts, that the sums were paid pursuant to board resolutions, after due sanction, and in accordance with the Bureau of Public Enterprises norms. The High Court regarded those findings as factual and therefore concluded that the Revenue's challenge did not raise any referable question of law, including on the characterisation of the payments as not ex gratia. The reference accordingly failed because the dispute turned on accepted factual findings rather than a legal issue under the Income-tax Act.

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Issues: Whether the amounts paid to employees as additional bonus were admissible revenue expenditure and whether the Tribunal's finding that the payments were not ex gratia raised any referable question of law.

Analysis: The income-tax authorities and the Tribunal had recorded concurrent findings that the payments were made pursuant to board resolutions, after due sanction, on the basis of the norms prescribed by the Bureau of Public Enterprises, and were described as additional bonus. The Court found these findings to be essentially factual. In such circumstances, no legal question arose from the Revenue's challenge to the allowance of the payment under section 36(1)(ii) of the Income-tax Act, 1961.

Conclusion: The reference failed because the concurrent factual findings did not give rise to any question of law; the Revenue's challenge was not accepted.

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