Ajit K.Sengupta, J. - (1.) This reference under Section 256(1) of the Income-tax Act, 1961, relates to the assessment year 1979-80.
(2.) Shortly stated, the facts are that the assessee, a limited company, was following the mercantile system of accounting. Under the terms of a scheme of amalgamation sanctioned by the Calcutta High Court, the Indian undertaking of Moran Tea Co. Ltd., a sterling company, was acquired by the present assessee as a going concern with all its assets and liabilities as at the close of the business on December 31, 1977. The assessee made provision for bonus at Rs. 15,40,720. The provision was made for the assessment year 1978-79. The assessee made payment of bonus of Rs. 18,08,911. The said payment exceeded the provision by Rs. 2,68,191. The excess payment was disallowed by the Income-tax Officer on the ground that it related to the earlier year.
(3.) The assessee came up in appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) was impressed with the arguments of the assessee and, accordingly, deleted the addition.;