CENTRAL PAINTS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (for short "the Act"), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following questions of law for the opinion of this court :

(2.) WHETHER, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in disallowing the sum of Rs. 37,206 being balance of actual payment made in respect of bonus ? "

(3.) AS regards the second question, the ITO has allowed the deduction on account of payment of bonus on actual payment basis. However, he disallowed the amount of Rs. 37,206, which was the liability in respect of the year 1972-73, and was paid in the year 1973-74, by debit to provision account. While allowing the said deduction the Commissioner (Appeals) observed as follows: