1999 (12) TMI 36

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....-85 and referred the following question of law for our consideration : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee's claim for bonus is admissible on accrual basis and not on payment basis ?" The assessee is a co-operative society. It made up its accounts taking the year ending June 30, as its accounting year and made a provision for bonus payable under the provisions of the Payment of Bonus Act. The assessee claimed deduction of the provision made towards the bonus, however, the Income-tax Officer disallowed the provision made for the years in question and allowed the actual payment of bonus only. The assessee preferred an appeal to the Commissioner....

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....en in case the assessee had maintained the cash method of accounting, the liability to pay bonus is allowable on accrual basis. He submitted that it is not permissible for the assessee to claim double deduction, one at the time of payment and another at the time when the provision for bonus was made in the accounts. Learned counsel relied upon the decision of the Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT [1991] 188 ITR 787, at page 789, and submitted that this court may direct the assessee to follow a regular system of accounting so that double deduction can be avoided. Mr. V. S. Jayakumar, learned counsel for the respondent, on the other hand, submitted that the assessee has been maintaining its books of accoun....