1995 (10) TMI 23

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ht in law in coming to the conclusion that the liability of Rs. 15,58,399 for Payment of Bonus Act, 1965 (as amended), was allowable under the provision of the Income-tax Act, 1961, in the assessment year under consideration ? " Having heard learned counsel appearing for the parties at some length, in our opinion, the question is of academic importance as will appear from the facts to be stated hereinafter and need not be answered. As a result of coming into force of the Bonus (Amendment) Act, 1977 (hereinafter called "the Act of 1977"), which came into force with effect from September 3, 1977, the assessee incurred additional liability of Rs. 15,58,399 for payment of bonus. The assessee follows the mercantile system of accounting. Hi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e coming into force of the Act of 1977, on September 3, 1977, no liability can be said to have accrued or arisen prior to that date and, therefore, the assessee cannot claim deduction in the assessment year 1977-78, the previous year of which ended prior to September 3, 1977. However, the Tribunal was of the view that as a logical consequence of the statutory provision referred to above when the liability of additional bonus became, the liability of the accounting year commencing on any day in the year 1976, and the previous year in question corresponded to that provision, the liability also must be deemed to have accrued or arisen during the previous year relevant to the assessment year in question and allowed the deduction claimed by the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ur opinion, the question of law raised in this case is of sheer academic value which need not be answered. We decline to do so. At the instance of the assessee also, the Tribunal has referred the following two questions for our decision : " 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the commission paid to the three directors of the company should be included in the remuneration for the purpose of determining the disallowance under section 40(c) of the Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the disallowance of Rs. 22,468 being the additional payment made on account of difference in fore....