1983 (10) TMI 93

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....e disallowance of bonus paid by the assessee to the extent of Rs. 1,99,781. 2. The assessee claimed deduction on account of bonus paid amounting to Rs. 3,48,337. The ITO restricted the allowance to 4 per cent in accordance with the provisions of the Bonus Act, 1975 and thereby he made a disallowance of Rs. 1,99,781. 3. The assessee appealed to the CIT (A) and urged that no where in the Bonus....

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....ced on the decision of the Supreme Court in the case of M/s Hukumchand Jute Mills Ltd. AIR 1979 (SC) 876 for the proposition that the payment of customary bonus does not come under the purview of the Bonus Act, 1975. It was also submitted that the assessee was rather compelled to pay the bonus at 8.33 per cent for commercial expediency inasmuch as payment of bonus at the rate lower than what had b....

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.... in the interest of good relations with the employees. I therefore, find no reason for disallowing a part of the bonus paid by the appellant. The addition of Rs. 1,99,781 is deleted." 4. Against the said order of the CIT (A), the Revenue has preferred the present appeal before us, and it was contended by the ld. Departmental representative that in view of the clear provisions of the Bonus Act, ....

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.... parties and considering the facts of the case, wear are of the opinion that the order of the CIT (A) does not require any interference. In accordance with the payment of Bonus Act every employer shall be bound to pay to every employee in respect of the accounting year commencing on any date in the year 1974 a minimum bonus which shall be 4 per cent of the salary or wages earned by the employee du....