Customary bonus beyond the statutory minimum was allowed as commercially expedient and not barred by the Bonus Act.

Payment of bonus above 4 per cent was treated as permissible because the relevant provision was read as imposing only a statutory minimum, not a ceiling on employer bonus. The assessee's consistent past practice of paying bonus at 8.33 per cent was accepted as evidence of a customary bonus pattern, and the payment was regarded as commercially expedient in preserving employee relations. On that basis, the excess bonus was held not to fall within the disallowance view taken by the assessing authority, and the disallowance was deleted.

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Issues: Whether bonus paid by the assessee in excess of 4 per cent was disallowable on the footing that the Bonus Act limited payment only to the statutory minimum.

Analysis: The relevant provision was read as imposing only a minimum obligation on the employer to pay 4 per cent bonus, without stating that payment above that rate was prohibited. The assessee's past practice of paying bonus at 8.33 per cent was accepted as showing a consistent customary bonus pattern, and the payment was also viewed as commercially expedient in maintaining employee relations. On that basis, the payment was held to fall outside the restrictive operation of the Bonus Act as applied by the assessing authority.

Conclusion: The disallowance of the excess bonus was rightly deleted and the assessee succeeded on the issue.

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