https://www.taxtmi.com/caselaws?id=27404 A provision described as set on of bonus under section 15(1) of the Payment of Bonus Act was held not to be an allowable deduction under section 37(1) of the Income-tax Act because it represented only a future contingent liability. The amount was not payable in the relevant year, was not deposited with any authority, and did not create an enforceable present obligation in favour of employees. As the liability depended on future contingencies such as workforce strength, length of service, and availability of surplus, it was treated as a reserve rather than expenditure incurred for business purposes. The deduction therefore failed. en-us Tue, 17 Jul 1984 00:00:00 +0530 Fri, 12 Feb 2010 15:31:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=27404 A provision described as set on of bonus under section 15(1) of the Payment of Bonus Act was held not to be an allowable deduction under section 37(1) of the Income-tax Act because it represented only a future contingent liability. The amount was not payable in the relevant year, was not deposited with any authority, and did not create an enforceable present obligation in favour of employees. As the liability depended on future contingencies such as workforce strength, length of service, and availability of surplus, it was treated as a reserve rather than expenditure incurred for business purposes. The deduction therefore failed. Case-Laws Income Tax Tue, 17 Jul 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=27404