2005 (4) TMI 19

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....tion of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1982-83 for opinion to this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the amount of Rs. 59,271 paid as incentive bonus was allowable expenditure?" The brief facts of the case are as follows: ....

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....ent. of the salary paid to the employees. In appeal before the Commissioner of Income-tax (Appeals), it was pointed out by the assessee that the incentive bonus was paid for better efficiency and it was being given to the workers since the year 1971 and was never disallowed. It was further pointed out that the incentive bonus had been paid at figures varying from 10 per cent. to 19 per cent. of th....

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....the salary it was rightly disallowed. The submissions of learned standing counsel cannot be accepted in view of the findings recorded by the Commissioner of Income-tax (Appeals) as well as by the Tribunal. Both the authorities have held that the amount was paid at figures varying from 10 per cent. to 19 per cent. of the salary depending on the performance appraisal of each employee on time scale a....

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....ly shall not exceed the amount of bonus payable under that Act. (the above proviso has been omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989). Section 37.(1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholl....