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of <h1>High Court rules in favor of assessee in income-tax appeal regarding bonus payments under Income-tax Act</h1> <h3>Commissioner of Income-tax Versus Sri Venkatesa Mills Ltd.</h3> Commissioner of Income-tax Versus Sri Venkatesa Mills Ltd. - [2010] 326 ITR 508 (Mad) The High Court of Madras delivered a judgment in an income-tax appeal against the order of the Income-tax Appellate Tribunal, Madras. The assessee, a company involved in the manufacture and sale of yarn and fabrics, had claimed a sum as bonus and ex gratia payable to employees in its accounts. The Assessing Officer disallowed a portion of this amount under section 43B(c) of the Income-tax Act, 1961, as the full bonus was not paid before the due date for filing the return of income. However, the Commissioner of Income-tax (Appeals) ruled in favor of the assessee, stating that the payment to an irrevocable trust for bonus disbursement constituted payment to the workers within the stipulated time. The Income-tax Appellate Tribunal upheld this decision, leading to an appeal by the Revenue. The High Court found in favor of the assessee, emphasizing that the payment to the trust was made prior to the prescribed date and was irrevocable, thus meeting the requirements of the law. The court dismissed the appeal, concluding that the assessee was entitled to the deduction for the bonus payment. The questions of law were resolved in favor of the assessee and against the Revenue. The judgment highlights the importance of meeting payment deadlines and the validity of payments made through trusts.
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