https://www.taxtmi.com/caselaws?id=1768 Bonus paid after the close of the accounting year remained deductible in the relevant assessment year where the employer followed the mercantile system and the liability arose under the Payment of Bonus Act. Section 19 recognises the statutory character of the obligation, so the liability is allowable in the year to which it relates even if the exact amount is settled later. A subsequent settlement fixing the bonus rate only quantified the pre-existing statutory liability and did not convert it into a purely contractual obligation. The excess over the provision in the accounts was therefore referable to the relevant accounting year and deductible in that year. en-us Mon, 05 Feb 2007 00:00:00 +0530 Sat, 02 Aug 2008 18:51:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=1768 Bonus paid after the close of the accounting year remained deductible in the relevant assessment year where the employer followed the mercantile system and the liability arose under the Payment of Bonus Act. Section 19 recognises the statutory character of the obligation, so the liability is allowable in the year to which it relates even if the exact amount is settled later. A subsequent settlement fixing the bonus rate only quantified the pre-existing statutory liability and did not convert it into a purely contractual obligation. The excess over the provision in the accounts was therefore referable to the relevant accounting year and deductible in that year. Case-Laws Income Tax Mon, 05 Feb 2007 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=1768