1973 (7) TMI 10

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.....T.A. No. 405 of 1970-71. The Tribunal has referred the following question of law for our opinion: "Whether, on the facts and in the circumstances of the case and keeping in view the provisions of the Payment of Bonus Act, 1965, the assessee is entitled to claim deduction of bonus of Rs. 6,200 relating to the financial year 1964-65 for the assessment year 1965-66?" The assessee in this case is not represented. M/s. Jai Bajrang Nail Industries' Prop. Net Ram Tirath Ram Moga (hereinafter referred to as the assessee) is an individual and manufactures nails and certain domestic goods. The reference pertains to the assessment year 1965-66 for which the financial year is 1964-65. In the profit and loss account of this year, the assessee made a....

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....s 'accounting year' and the assessee's accounting period now under consideration is a period to which the provisions of the Bonus Act apply in view of the definition in section 2(1)(iii)(a). Thus, it is clear that the provisions of the Bonus Act apply to this accounting period. The bonus for the accounting period, under the Bonus Act, had to be computed with reference to the 'available surplus' as defined in section 2(4) which was 60% of the 'available surplus' as defined in section 2(6) read with section 5. The available surplus is the figure arrived at on deducting from gross profits the amount mentioned in section 6. The Second Schedule to the Payment of Bonus Act prescribes the methods of computing the gross profit. This has to be with ....

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....ssioner of Income-tax v. Mysore Electrical Industries Ltd. In the present case, the bonus payable related to the accounting period under consideration and the assessee, therefore, sought for the deduction of bonus as computed in accordance with the provisions of the Payment of Bonus Act, 1965, which covered the accounting period. As the assessee maintains its accounts on the mercantile system, we are of the view that the amount of Rs. 6,200 is, on the facts set out by us, an admissible deduction for this assessment year. We allow the same as a deduction." Thereafter, the Additional Commissioner of Income-tax filed an application and, as earlier observed, on that application the question reproduced above has been referred to this court for ....