https://www.taxtmi.com/caselaws?id=71480 Bonus, productivity bonus, festival bonus and ex gratia paid to employees covered by the Payment of Bonus Act are deductible only up to the statutory ceiling, and any excess must independently satisfy the test of commercial reasonableness under section 36(1)(ii) of the Income-tax Act. On the facts, the assessee could not show allocable surplus, higher productivity, industrial necessity, or any material basis for the additional payments; agreements or settlements alone were insufficient. Section 31A of the Bonus Act did not justify deduction beyond the statutory limit. The excess payments were therefore not allowable as business expenditure. en-us Tue, 23 Feb 1993 00:00:00 +0530 Mon, 25 Apr 2011 11:07:33 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=71480 Bonus, productivity bonus, festival bonus and ex gratia paid to employees covered by the Payment of Bonus Act are deductible only up to the statutory ceiling, and any excess must independently satisfy the test of commercial reasonableness under section 36(1)(ii) of the Income-tax Act. On the facts, the assessee could not show allocable surplus, higher productivity, industrial necessity, or any material basis for the additional payments; agreements or settlements alone were insufficient. Section 31A of the Bonus Act did not justify deduction beyond the statutory limit. The excess payments were therefore not allowable as business expenditure. Case-Laws Income Tax Tue, 23 Feb 1993 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=71480