https://www.taxtmi.com/caselaws?id=22629 Ex gratia or customary bonus paid to employees under a settlement, over and above the statutory bonus under the Payment of Bonus Act, 1965, was held allowable as a deduction where the payment was made consistently in earlier years and was commercially expedient. The court accepted that the statutory bonus regime does not exhaust all bonus payments, and that deductibility depends on the surrounding business circumstances and reasonableness of the outlay. Because the payment was made wholly and exclusively for business purposes to maintain employer-employee relations, secure industrial peace, and avoid strikes or lock-outs, it satisfied the test for business expenditure under the Income-tax Act, 1961. en-us Tue, 22 Aug 1989 00:00:00 +0530 Fri, 11 Dec 2009 15:59:26 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22629 Ex gratia or customary bonus paid to employees under a settlement, over and above the statutory bonus under the Payment of Bonus Act, 1965, was held allowable as a deduction where the payment was made consistently in earlier years and was commercially expedient. The court accepted that the statutory bonus regime does not exhaust all bonus payments, and that deductibility depends on the surrounding business circumstances and reasonableness of the outlay. Because the payment was made wholly and exclusively for business purposes to maintain employer-employee relations, secure industrial peace, and avoid strikes or lock-outs, it satisfied the test for business expenditure under the Income-tax Act, 1961. Case-Laws Income Tax Tue, 22 Aug 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22629