1997 (3) TMI 17

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....instance of the Revenue, the Appellate Tribunal, has stated the case and referred the following question of law, for the opinion of this court for the assessment year 1979-80 : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has rightly held that the payment of Rs. 22,54,136 in pursuance of the settlement between the assessee-company and the worker....

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.... of the Act. The Commissioner of Income-tax (Appeals), disagreed with the views of the Income-tax Officer, and held that what was paid was not bonus at all, and it is allowable under section 37 of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). The Appellate Tribunal, on appeal, also held that the amount was paid by virtue of commercial expediency, and the amount cannot be regarde....

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....s to the memorandum of settlement arrived at under section 12(3) of the Industrial Disputes Act between the assessee and the trade union of the assessee. In the memorandum of settlement, it mentions that in addition to the bonus that is payable under the Bonus Act, the assessee has also agreed to pay certain additional amount shown in the annexures to the agreement. Clause 2 of the settlement ment....

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....ed of discontent in the minds affecting the smooth and proper running of the assessee's business. Therefore, we are of the view that the additional amount was paid on commercial principles and commercial considerations, and is allowable under section 37 of the Act. In CIT v. Sivanandha Mills Limited [1985]156 ITR 629, this court has held that section 36(1)(ii) will apply only in the case of bonus ....