TIRUNELVELLI MOTOR BUS SERVICE CO Vs. COMMISSIONER OF INCOME TAX MADRAS

JUDGEMENT

(1.) This is an appeal by certificate from a judgment of the Madras High Court answering the following question which had been referred to it under Section 66 (1) of the Indian Income-tax Act, 1922, hereinafter called the "Act" in the affirmative and against the assessee.

(2.) In the accounts relating to the assessment year 1950-51 the assessee had claimed a sum of Rs. 4,09786/- as establishment charges which included a sum of Rs. 71,949/- representing the annual bonus payable to the employees. This amount had actually not been paid but had been shown on the debit side. The assessee ran into financial difficulties and the bonus remained unpaid for some years. In the accounting year relevant to the assessment year 1957-58 with which we are now concerned a sum of Rs. 17,470/- was paid to the employees as bonus in full settlement and the balance of Rs. 54,479/- was credited to the profit and loss account. The Income-tax Officer treated the credit of Rs. 54,479 so made as income accruing in the year of account. The Appellate Tribunal while dealing with the appeal observed:

(3.) In our judgment the finding of fact of the Appellate Tribunal did not warrant the answer returned by the High Court which is hereby discharged. The answer would thus be in the negative and in favour of the assessee. The appeal is accordingly allowed with costs.