1992 (11) TMI 20

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....ion 41(1) of the Income-tax Act, 1961, respectively in the assessment for the assessment years 1982-83 and 1983-84 ?" Shortly stated, the facts are that the assessee, a resident company, during the accounting year ending on June 30, 1981, being the relevant assessment year 1982-83, wrote back to its profit and loss account an aggregate sum of Rs. 88,010 representing unpaid and unclaimed bonus. A similar amount for the accounting year ending June 30, 1982, relevant to the assessment year 1983-84 is Rs. 2,25,600. The liabilities were written back as they were no longer considered necessary to be carried as liabilities. The Assessing Officer brought the amounts to tax on the ground that, by conduct, the assessee has disowned having any obli....

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....by the employees of the appellant by claiming fictitious payments of the said liabilities". The Commissioner of Income-tax (Appeals) has, however, gone by the mere averments of the appellant that the liabilities written back are shifted to a special register and a specific watch is kept on actual payments of the said liabilities. The statement of the appellant that such write-back of liabilities is a regular feature in the assessee's accounts is a cause for alarm. Such write-back, as a recurring event, could be a means whereby the assessee could, on the one hand, get its profit kept down by way of provision for expenditure which the assessee does not mean to or has no need to discharge and can go scotfree by recycling such provisions ....

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.... It was altogether in a different context. The Supreme Court overruled the employer's refusal to transfer unpaid and unclaimed wages to the Bombay Labour Welfare Fund in the teeth of the statutory requirement under the said State Act on the ground that unclaimed wages are barred by limitation. The Supreme Court held that though the liability is unenforceable by the eligible payee after the expiry of the period of limitation, yet the liability is such that it did not become extinguished and the statutory requirement for transfer of such amount to the Labour Welfare Fund shall have its sanction and the employer is bound by the operation of law to transfer the liability to the statutory fund. The entire context and perspective in which the Sup....