Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1984-85, the following question of law has been referred to this court : "Whether, on, the facts and in the circumstances of the case and also having regard to the specific provisions of Section 36(1)(ii) of the Income-tax Act, 1961, the Tribunal was correct in law in holding that the payment of bonus as per bipartite agreement cannot be called as bonus as it was made for the purpose of the business and deductible under Section 37(1) of the Income-tax Act, 1961?"
(2.) The facts relating to this reference are that, in its books of account relating to the year of accounting ending on March 31, 1983, the assessee had made a provision in respect of the minimum bonus payable to its workers for the said year under the Payment of Bonus Act. Therefore, as a result of a bipartite agreement dated September 22, 1988, the assessee paid a further sum of Rs. 56,888 to its employees. The said sum was paid over and above the minimum bonus payable under the Payment of Bonus Act. The assessee claimed revenue deduction in respect of the said sum. The Income-tax Officer disallowed the claim on the ground that any payment in excess of what is payable under the Payment of Bonus Act was not revenue deduction.
(3.) On his part, the Commissioner of Income-tax (Appeals) allowed the assessee's claim on the ground that the payment in question could be considered under Section 37(1) of the Income-tax Act, 1961.;